According to the Internal Revenue Service, up to 25% of Americans wait until the last two weeks before the tax deadline to file their return. Avoid the stress that comes with procrastination by using these five tips to reduce hassle during tax season.
1. Go paperless
Today there are numerous digital tools that allow you to keep your important tax documents organized and easily accessible. Save money by foregoing a bookkeeper and organizing your own records.
Don’t have time to sort through piles of paper? Luckily the IRS has been accepting digital documents since 1997, so join the digital revolution and ditch (well, recycle!) the paper.
You’ll also feel better knowing you have digital versions securely stored in the cloud that you can access anytime, anywhere. You may also want to check out online accounting tools like Xero, depending on your personal and business tax obligations.
2. Do your research
Over 90% of Americans have their taxes prepared by a professional or use tax software.
Both options save time and money, as well as help prevent mistakes. However, all penalties fall on you whether you use an accountant or not, so doing your own research is a good idea. IRS.gov is a good place to start.
Once you’ve learned the basics and determined which form(s) you need to file, start researching the option that best suits your tax needs. TurboTax, H&R Block and TaxACT all offer easy-to-use software programs for individuals, but if you own a small business, finding a reliable accountant may be your best bet.
3. Save money
One of the most important tax tasks for most people is saving as much money as possible. No one wants to pay more taxes than they have to, right?
The first step is deciding whether you should itemize your deductions, or instead claim the standard deduction. If your allowable expenses during the year exceed the standard deduction for your filing status, itemizing will likely save you more money in the end, even if it does take more time.
There are numerous online resources to help you research deductions, especially if you’re self-employed or own a small business.
Listing your deductions beforehand will not only reduce the chance that you’ll miss one, but it will also make you feel more prepared when you go to fill out the dreaded form.
4. Save time
According to the IRS, over 100 million taxpayers opted to e-file their taxes online in 2012. Don’t waste time with paper forms and mailing; simply navigate to www.irs.gov/filing and choose the option that fits your tax obligations.
5. File an extension
If you need a little extra time to complete your return, file a tax extension by April 15 and you’ll have until October 15 to submit it. Filing an extension is the best way to avoid penalties and take advantage of the extra time to double- and triple-check your return before filing.
Taxes are no fun, but being done with your taxes for the year is! What steps do you take before the tax deadline to make sure you’re prepared?
This post was written by Emily Farrar, Lead Customer Advocate at Shoeboxed, the premier document scanning and organization service since 2007.