For Individuals
1. Gather Your Tax Documents
The first step in preparing for tax season is ensuring that you have all the necessary documents. While the list below is not exhaustive, it’s a great place to start! Collecting these documents early will help you avoid last-minute scrambling when it’s time to file.
Key Documents to Collect:
- W-2 Forms from your employer.
- 1099 Forms for additional income, such as investment or retirement income.
- Form 1095-A if you had health insurance through the marketplace.
- Receipts for deductible expenses, including medical bills, charitable donations, mortgage interest, childcare costs, etc.
- Records for side hustles or freelance work, including income and any related expenses.
2. Organize Personal Information
Your personal information is crucial for filing an accurate return. Make sure to:
- Provide Personal Identifying Information, such as your name, Social Security Number (SSN), address, and date of birth.
- Update your accountant on any changes to contact information, including name, address, phone number, or email.
- Prepare banking information for direct deposit of refunds or direct debit for taxes owed.
3. Review Life Changes
Major life events can impact your taxes. Review the following questions, and if you answer “yes” to any, be sure to inform your tax preparer:
- Did you change jobs?
- Did you get married or divorced?
- Did you have a baby?
- Did you sell your home?
- Did your child start college?
For Businesses
1. Update Your Records
Begin by updating your financial records for the year. This includes your balance sheet, income statement, and general ledger. These documents are essential for preparing your taxes and understanding your business’s financial health.
Key Tasks:
- Record all income, such as invoices and sales receipts.
- Track deductible expenses, including rent, office supplies, and utilities.
- Prepare payroll forms and 1099s, if applicable.
2. Review, Reconcile, and Correct Errors
After updating your records, carefully review them to identify and correct errors before submitting them to your accountant.
Steps to Follow:
- Reconcile your bank statements, loan statements, and credit card statements with financial institution documents.
- Review your financial statements for accuracy and completeness. Investigate anything that seems off.
- Correct any errors, including issues with payroll forms or 1099s.
3. Compile Supporting Documentation
Your accountant may need documentation to support income or expenses, especially large or unusual items. Organized records help streamline the return preparation process.
Important Documents to Prepare:
- Receipts for deductions claimed, particularly large ones.
- Detailed records to support tax credits claimed.
- Documentation for depreciable items, like vehicles or large equipment.
Additional Tips for Everyone
Know Your Deadlines:
- Mark your calendar for key dates, including the April 15 filing deadline.
- Businesses should also note quarterly tax payment deadlines.
Consider Filing Extensions:
- Filing an extension is simple if you need more time, but keep in mind that taxes owed are still due by the original deadline.
Work with a Trusted Tax Professional:
- Navigating tax laws and maximizing deductions is much easier with expert guidance.
Why Preparation Matters
Being organized saves time, reduces stress, and ensures you take advantage of every tax-saving opportunity. White Spruce Accounting is here to make tax season as smooth as possible for you.
Ready to Get Started?
Contact White Spruce Accounting today to schedule a consultation or upload your documents through our secure client portal. We proudly serve individuals and businesses locally in Pike County, PA, as well as virtual clients across the U.S. Let’s tackle tax season together!
Disclaimer
The information provided in this blog is for general informational purposes only and should not be considered tax, legal, or financial advice. Every individual and business has unique circumstances, and tax laws are subject to change. You should consult with a qualified tax professional or accountant for advice tailored to your specific situation. White Spruce Accounting is not responsible for any errors or omissions, or for any actions taken based on this information.