Seven Ways to Start Preparing for Tax Time

1. Choose Your Preparer & Schedule an Appointment

Assuming you don't already have a tax preparer, now is the time to get yourself one. Selecting your preparer may be one of the most important decisions you can make regarding your business and finances, so taking your time here and ensuring that you do your research will never hurt.

One way to get leads on trustworthy and efficient preparers is to speak to friends and advisors; pulling through reviews online, looking up certifications, and so on should also be a part of this process. It's critical that you ensure whoever you choose has a Preparer Tax Identification Number (PTIN).

As soon as you've selected a preparer and they've agreed to work with you get a meeting set up with them. The sooner you can get started on the tax preparation process, the longer you'll have to work out bumps and kinks along the way. Should you be eligible for a refund, you'll also receive those funds sooner the quicker you get to work.

2. Gather Your Information Returns

As January draws to a close, you should find yourself in possession of forms and information returns that you may need to prepare your taxes. Take the time to go over each form individually and verify that whatever information is displayed matches your own records. This is another time when getting ahead of the game can help tremendously-- if something is wrong, it can take a considerable amount of time to get things back in order.

Some common forms to be on the lookout for and start going over include:

• Form W-2 if you've got a job
• Form SSA-1099 if you were the recipient of Social Security benefits
• Various 1099s to report income; these may include cancellation of debt, dividends, and interest
• Form 1095-A for reporting from the government Marketplace from which you obtained health coverage

3. Get Your Receipts Ready to Go

It can be tough to know exactly which receipts you need; that preparer selection you made should certainly be coming in handy at this point. Get in touch with your preparer for the nitty gritty, but there are a few basics to consider while you wait to touch bases:

1. Decide whether you'll itemize your personal deductions or claim the standard deduction.
2. You can choose to itemize in cases where it may provide a greater write-off
3. You can only determine whether this is the vase by determining the amount of your itemized deductions and comparing them to your standard deduction amount
4. For itemizing , get your receipts in order ASAP; ideally you'll have a system in place already to manage this in an organized way; if not, now's the time to get it done
5. Look for receipts for things like medical costs that aren't covered by insurance or are reimbursed by other health plans
6. Also be on the lookout for receipts from property taxes and job and investment-related expenses

4. Get Up to Speed on Recent Tax Law Changes

A slew of tax law changes took effect in 2018 and more are on their way this year. Understanding these laws and changes and what they mean for you and your organization is critical. Some key things to keep in mind are:

• There are new forms for claiming the premium tax credit for individuals who got their coverage through a government Marketplace
• Beginning in the 2019 tax year, there is no longer a penalty for not having health insurance
• The home-equity loan interest tax deduction has ended
• There has been a drop in the home-mortgage interest deduction on many new mortgages
• State and local deductions now max out at $10,000

5. Make a List of Personal Information

This seems so obvious and simple that perhaps one would think it doesn't need mentioning-- but it does. Nobody would bat an eye if you said that you knew your own social security number, but can you list off the ones that belong to each and every dependent you claim? If not, it's time to get that information easily accessible and ready to go.

Other things to get written down and organized include:

• The addresses of any rental properties or vacation homes you own
• Dates that you moved (this could be related to your household or your business)
• Information pertinent to any property you've bought or sold

6. Decide How to Handle a Refund

You have a few choices when it comes to accepting your tax refund from the government. Knowing which of these you'd prefer and getting that choice locked in and communicated ASAP will mean a quicker return for you and fewer headaches for your preparer.

1. Apply the refund (in part or in whole) towards your next return's tax bill
2. Have a check or direct deposit sent to you with the full amount of your refund
3. Directly move (again, in part or in whole) your refund into certain accounts like an IRA or health/education savings account

7. Grab a Copy of Last Year's Return

This will be easy if you're using the same preparer that you have in previous years; and even if you aren't, it shouldn't be a tremendous struggle. If you have a new preparer, looking over last year's return with them can help give them an idea of pointers and things not to overlook this time around. If you received any income related to payers of interest and dividends last year, for example, you should be waiting for a relevant 1099 to land in your mailbox this year.

If you're interested in leaning more about how to prepare for tax season, email our office or drop us a line today! We would be more than happy to speak with you about your business' individual and unique needs and assist you in setting up a plan of attack that's sure to get you through the battles of tax season.