The 2015 IRS tax-filing season is right around the corner. It officially kicks off on Tuesday, Jan. 20 when the IRS will begin accepting both paper and electronic returns.
Related Article: How to Maintain a Sane Approach to Taxes
So what should you do now to be ready? Here are 7 things to put on your tax-filing checklist:
1. Get your receipts in order.
If you are a self-employed small business owner or an individual taxpayer, it’s a must to save your receipts and keep them organized. This is particularly important for those who are allowed to deduct expenses related to doing business. For example, you may purchase equipment, services, meals, entertainment, gas, and other items that you can write off as business expenses. For individuals who hold W-2 jobs with an employer, you may be able to claim unreimbursed employee expenses that you incur for your job but are not reimbursed on by your employer. Additionally, if you made any charitable contributions in 2014, make sure you have the documentation on file from the charity to claim this deduction on your return. The IRS is adamant about having taxpayers prove their deductions, so be sure you are prepared with your receipts and documents indicating this information.
2. Review any life changes from last year.
Did you get married last year? Did you have a child? There are several life changes that can affect your tax status. You might go from being a single taxpayer last year to the better half of a married couple who files jointly. Or, you might now be a head-of-household filer. There are also lots of IRS tax deductions and tax credits you can claim for life changes. Review any new occurrences in your life from last year and determine if your tax-filing status has changed before submitting your return to Uncle Sam.
3. Have a tax-saving plan in mind.
Don’t forget about all the write-offs and credits that can reduce your tax liability this year. Check out the home office deduction, the vehicle deduction, the dependent care credit, the lifetime learning credit, and the dozens of other tax benefits you may qualify to claim. These tax-saving measures can often save taxpayers hundreds—if not thousands—of dollars on their tax bill.
4. Small business owners should send contractors Form 1099 by Jan. 31.
If you’re one of the millions of American small business owners out there with independent contractors working for you, you likely have an additional tax-related deadline coming up before April 15. A copy of Form 1099 must be distributed to any individuals who performed work for you in 2014, mainly if their work was done as an independent contractor and the amount you paid them met certain minimum requirements. This form should be distributed no later than January 31.
5. Determine how you’ll prepare your taxes.
Will you use an accountant to help you prepare your taxes? If you’re a small business owner, it’s a wise option. This is because business taxes come with significantly more responsibilities compared to personal tax filings. Make this determination before tax season kicks off so that you’ll be ready to get your tax returns prepared and sent off to the IRS on time.
6. Determine how you will file.
There are multiple filing options, from mailing a paper return to e-filing. Of course, you could let an accountant prepare and file your taxes on your behalf, giving you more time to focus on your personal life and small business activities.
7. Determine if you will need an extension.
If you won’t be able to meet the IRS 2015 tax-filing deadline of April 15, you can always file for an extension of time. Generally, tax extensions for personal filings are granted for 6 months, meaning your new filing deadline would be bumped up from April 15 to October 15. Getting an extension is important if you know you simply won’t be ready to file on time. Plus, you can avoid late-filing and late-payment penalties by obtaining an extension rather than filing a late return.
This article was originally published by 1800 Accountant
Published: January 15, 2015