T is for Time to Get a Head Start on Your Taxes

T is for Time to Get a Head Start on Your Taxes

The start of a new year means that it is time to start thinking about filing your taxes. Getting a head start will make your life and your CPA’s life easier. And while it may not be time just yet to turn everything in to do your taxes, doing a little bit of prep work now will save you lots of time and worry in the future.

Every year the way we are taxed gets updated to keep up with inflation and other financial events from the prior year. In addition, some states change due to ballot measures, and some change responding to their budget. As we enter 2022, 21 states and the District of Columbia have significant tax changes taking effect for the year. To find out what is happening in your state, click here.

Learning about the tax laws for the year you are filing helps considerably when gathering your documents. Finding all the necessary documents tends to be time-consuming, but making a list of all the documents needed to file your taxes will keep you organized as well as well prepared.

Here is a list to help aid you assemble your documents:

A copy of last year’s tax return.

Any benefits you receive, including Social Security or Unemployment benefits.

W-2s from your employer.

Any receipts for your small business, properties, etc., if applicable.

Other income forms, such as 1099, 1095-A, or form 8962.

Once you have gathered the necessary documents, it is time to choose how to file. There are three ways to file electronically, through the mail, or with a professional. Tax software makes filing electronically easy, and the IRS even has a free version. But if you have a lot of complicated investments and incomes, sometimes it is best to hire a professional for a fee. While this may not seem like something you would want to pay for, sometimes it is best to let an expert help you rather than trigger an IRS audit. If you choose to mail in your taxes, know that this way takes the longest for the IRS to process.

Filing your taxes does not need to be a tremendous and overwhelming ordeal. A little bit of knowledge and preparation can turn this task into something you can easily tackle year after year.


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