Ways To Get Ready For Tax Preparation

Feb 12, 2024 By Triston Martin

The IRS reports that about 85 million individuals have paid someone else to prepare and file their tax returns (IRS). If you fall into this category, you should gather your tax paperwork (such as forms and receipts) as early as possible.

Your preparer may interview you or have you fill out a questionnaire to gather information. In any case, being well-prepared is the key to sailing through the procedure with minimal fuss. The following instructions are helpful for anyone who does their taxes.

Select a Tax Professional

An excellent strategy to discover a tax preparer if you don't already have one is to get recommendations from people you trust, such as friends and financial advisers. Check their preparer tax identification number to verify that they are licensed to do federal income tax returns.

Find out how much money you'll need to pay in fees by asking ahead of time. The answer to this question, of course, depends on your tax return's intricacy. If the company you're considering takes a cut of your return, go elsewhere.

Arrange a Meeting

If you do decide to request an extension, the sooner you meet with your preparer, the sooner you should be able to finish your return. Any refunds you were expecting will also arrive sooner. Putting off making an appointment with a tax preparer might mean missing the deadline to submit your return.

Round Up Your Expenses

Whether you itemize your deductions or take the standard deduction will determine whether you need to furnish receipts. To determine which yields a more significant write-off, you must first sum up your itemized deductions and compare the total to your standard deduction.

The standard deduction for an individual taxpayer in the tax year 2021 is $12,550, while that of a married couple filing is $25,100. In 2022, the single filing threshold will be $12,950, and the joint filing threshold will be $25,900.

You should check for documentation of payments made out of pocket for medical care, property taxes, and investment charges that aren't reimbursed by insurance or another health plan.

List Your Personal Information

You undoubtedly already know your own Social Security number, but do you also know the Social Security numbers of any dependents you want to claim? It would help if you wrote them down, along with anything else your tax preparer might want.

Put in the addresses of any properties you own, whether for personal use or rent. Keep track of when you acquired and sold any property you've sold in the past year and the initial purchase price, final sales price, and total proceeds.

When Must Taxes Be Submitted?

The deadline for filing federal income tax returns is always April 15. Since April 15 is a holiday in Washington, D.C., the deadline for most taxpayers to submit their 2021 tax return has been extended to April 18, 2022.

The Internal Revenue Service has the authority to provide extensions of time to file returns. For instance, because of the "exceptional circumstances relating to the pandemic," the deadline for filing tax returns for 2020 was pushed from April 15 to May 17, 2021. Thanks to the extension, the new tax payment deadline is May 17, 2021.

Collect a Duplicate of Last Year's Tax Form

Using the same preparer as the prior year ensures they will have all your historical data. If you are switching tax preparers, having a copy of your previous year's return handy might serve as a helpful reminder of any details you may have forgotten. Two instances are as follows:

Dividends And Interest:

Last year's tax return should include a list of all the financial organizations (banks, mutual funds, etc.) who issued 1099 forms to you. Verify that you received 1099s from all the companies on that list again this year.

Charity Deductions:

Even if the charity you donated to did not send you a receipt or thank you letter for your little gifts, you could still claim a tax deduction for the whole amount. To determine if your charitable contributions this year were comparable to those you made last year, see the list of groups that received your money in 2017.

In Conclusiveness

Whether you do your taxes or hire a professional, getting your paperwork in order ahead of time will save you time and, if you end up hiring a preparer, money. The earlier you begin, the less stressful the process will be, and the sooner you can put it to rest for another year.

Related articles

6 Factors That Will Determine If CD Rates Go Up in 2022

By Triston Martin / Dec 30, 2023

CD rates are expected to increase in 2022, but not significantly. The reason? Yields on CDs aren’t likely going up and could even decrease slightly due a drop that was seen last year when many banks offered ultra-low 2% interest rate options just for keeping your money safe!


A Comprehensive Guide to Pension Payment Order

By Susan Kelly / Jan 20, 2024

Discover the essentials of Pension Payment Orders, from understanding its components to obtaining and managing it for a secure retirement.


How to Buy a Home in Your 20s?

By Susan Kelly / Oct 05, 2023

Having our own home is something everybody wishes to have one day, especially in our 20s. Moreover, if we have the capability and means to invest when young, then it is ideal to buy our own home in our 20s.


What are Collection Costs: Legality of Extra Fees by Debt Collectors Unveiled

By Triston Martin / Jan 14, 2024

Do you want to know the truth about collection costs? Let’s learn whether debt collectors can legally add extra fees to your outstanding balances.


An Overview of Visa Infinite Perks

By Triston Martin / Feb 03, 2024

Visa offers three different types of credit cards to suit the needs of people with diverse incomes and spending habits. Visa Infinite is the highest tier in exclusivity and rewards, with a growing set of perks for cardholders as they progress. Remember that you'll need to invest some money to reap these rewards


Everything About Routing Number

By Triston Martin / Feb 06, 2024

In the United States, clearing money for electronic transfers or processing checks requires using a nine-digit number known as a routing transit number. This number is used to identify a particular bank or financial institution. In addition, internet banking and clearinghouses are also places where a routing transit number is used to process financial transactions.


Can You Get a Mortgage in Retirement?

By Susan Kelly / Dec 29, 2023

Most individuals get a mortgage while they are still in their working years since this is the time in their lives when their income is at its peak, and it is the simplest time to make payments. It is not the situation for everyone. You may be moving to be closer to family and need a mortgage to make a move possible. Alternatively, you could be downsizing to a new property.


How to Help With Wage Garnishment on Student Loans?

By Triston Martin / Nov 13, 2023

Student loans can make higher education more affordable, but repaying them after graduation requires you to have a job with a steady income that allows you to keep up with the required payments. You may default on your student loans if you cannot locate a repayment plan suitable for your financial situation or if you do not qualify for a deferment. One of the implications of your loan defaulting is that your salary may be garnished.


A Guide to Understand: Pros and Cons Using Airbnb

By Susan Kelly / Oct 20, 2023

Airbnb has become a huge change agent in the hospitality industry. I won't go into a lot of detail about AirBnB's history, but in short, it was started by two guys in San Francisco who rented out air mattresses and turned that into a popular travel uprising. Airbnb is now worth more than $10 billion, and it is the best place to find one-of-a-kind travel experiences.


Why Interest Rate Hikes by the Fed Can Hurt: A Comprehensive Analysis

By Triston Martin / Jan 25, 2024

This explores the significant implications of Fed's rate hikes for businesses, consumers, and the global economy; offers strategies to mitigate their impact.


RBC Wealth Management Investment Company Review

By Susan Kelly / Oct 15, 2023

RBC Wealth Management Investment Company, a Canadian-based investment firm that offers personalized advice and services to help investors reach their financial goals. Discuss the advantages of using RBC Wealth Management, such as access to experienced advisors, personalized investment advice, competitive pricing on trades, and the ability to create tax-advantaged accounts for long-term growth.


How to Invest in Cotton Stocks and What to Watch out For?

By Triston Martin / Nov 11, 2023

Are you learning to become a good cotton stocks trader? Then, read the article in detail and learn the basics of how to invest in cotton.