If you haven’t yet filed your personal taxes, time’s a’ ticking. Here are some last-minute tips to ensure that your taxes get filed correctly.
1. Bone Up on Your Tax Deductions
Before you get knee-deep in filing your own taxes or head to a tax preparer to help, it’s wise to know what tax deductions you qualify for. For example, if you work from home, you may be able to deduct your home office expenses. If you travel for work, your travel expenses may be a writeoff.
2. Know How You’ll Pay
If you haven’t been paying your estimated taxes quarterly (a practice you may want to consider so you don’t have a hefty bill in April), you will need a strategy for paying your taxes come Tax Day.
If you’ve got the funds in your bank account, pay the entire amount at once. If that’s not an option, apply for a payment plan that will allow you to spread a monthly payment out over several months to ease the burden.
While it’s a last resort, you can also consider paying your taxes on an interest-free credit card (especially one that accumulates airline points or other rewards). Just make a plan for paying it off promptly.
3. Gather What You’ll Need
Hopefully you’ve been organized throughout the year and have all your W-2s, 1099s, and receipts, and you’ve properly categorized all your expenses in your accounting software. Being organized will make it easier for either you to DIY your taxes or for a professional to process them.
If you found it stressful to gather all of this paperwork this time around, make sure to be ready next year. Set up a folder for each tax year and put all the necessary paperwork there so it’s ready when you need it.
4. Ask for a Referral
If you plan to hire a tax preparer or accountant to file your taxes for you this year (a good idea if you’re overwhelmed with other things, or if your tax situation is complicated), ask people in your network for a referral to a good tax professional. Ideally the individual or company has experience with small businesses like yours. Now’s a good time to call for an appointment, since a lot of people wait until the last minute, and you’ll be in a long line to get your taxes done.
5. Apply for an Extension
If there’s no way you can get your stuff together in time to meet the April 18 deadline for taxes to be filed, consider applying for an extension. This will give you an additional 6 months to file your taxes. Keep in mind, however, this does not give you an extension on paying what you owe. You’ll need to pay your estimated tax by April 18 if you don’t apply for a payment plan as well.
Even if you’re a procrastinator, being organized and doing a little planning now will make filing your taxes a bit easier.
Make paying taxes next year a breeze by letting CorpNet convert your business to a corporation. We can tell you all about the tax benefits of doing so.
Image: Photo Dollar Club