Tax season has begun! And for many, the daunting task of tax preparation provokes anxiety and procrastination. And a lack of financial organization makes the process all the more challenging.
At Eddy & Schein, we see a myriad of reasons our clients come to us for help with organizing for tax preparation:
- Disorganized finances
- Not having filed taxes for years
- Defaulting on or making only sporadic payments on tax payment plans
- Neglecting to pay estimated taxes
- Having to file multiple state returns because of a move or income sources in other states
- Missing out on all the deductions to which they’re entitled
- Documenting medical-related transactions
- Tracking and reporting expenses related to the purchase and improvement of a house they’re selling
Tax Preparation Needs and Wants.
Now is a good time to evaluate whether your tax preparer is a good match for the complexity of your tax situation.
- Do you want to sit down in person with your accountant and have them organize your data?
- Do you prefer using an accountant’s online portal to minimize the collection and transmission of paper?
- Have you outgrown online or franchised tax preparation services and now need more personalized service?
- Are you paying too much for an accountant/tax attorney offering more sophisticated expertise than you need?
Determine if your answer to any of these questions is aligned with your current tax preparation process. If not, seek a professional or service that can help make your tax season less frustrating. Eddy & Schein Group can help you organize so that you’re ready to hand off your tax information to your preparer.
Tax Organization Tips
Keep It All Together
Start by creating a physical or digital filing system to collect all tax documents and information for easy and organized access.
Use Helpful Tools
If your accountant provides you with a tax organizer, use it as a guide to inform you (or someone assisting you) about your previous year’s data:
- Income sources you reported to the IRS last year
- Deductions and credits you took last year
- Your filing status
- Number of dependents you claimed
- Your bank account for direct deposit of refunds
Make Yourself Smarter about Tax Preparation
Find more understanding and some specific instructions in our helpful articles: Getting Organized for the Tax Season, 8 Important Things to Give Your Tax Accountant, and, if you’re helping your parents or other seniors with their taxes, Helping Senior Parents Organize for Tax Season. You can also download a free copy of our Tax Season Tipsheet.
Filing an Extension
If you need or want to put off the inevitable for a few months, just know that even if you request a filing extension, any tax you owe needs to be paid along with submitting the extension. So, you’ll still need to give your accountant a general idea of your income and deductions now so they can estimate your tax liability.