Preparing Tax Return you Begin
It’s never too early to start planning for your 2021 US Preparing Tax Return, which is due on April 18, 2022.
To submit your Preparing Tax Return, you’ll need specific information and documents, regardless of whether you do it yourself or hire a professional. We’ve come up with a handy tax preparation checklist to make the process less of a hassle for you!
Collect All of Your Paperwork
Before you begin, collect all of the forms and documents you’ll need to complete your return. It’s a great idea to gather paperwork throughout the year and then place them in a designated folder.
You can always refer to this folder if you need information from a previous year, too.
Here are some of what you’ll want to save:
- W-2 from each employer
- 1099 forms
- SSA-1099 for Social Security benefits
- 1095-A for Health Insurance Marketplace reimbursements
- 1098 for mortgage interest received
- 1098-T for tuition paid
Round up Your Receipts
It doesn’t matter whether you itemize your deductions or take the standard deduction; you’ll want to know which generates a larger tax deduction. While filing as a single taxpayer, the standard deduction is $12,550; when filing as a married couple filing jointly, the standard deduction is $25,100. Individuals filing single returns will be able to claim $12,950, while married couples filing jointly will be able to claim $25,900 in 2022.
If you want to itemize your deductions, you’ll also need to gather any additional funds you may have set aside for charitable contributions. Ensure that you keep track of any receipts for medical expenses that were not covered by insurance or reimbursed by another health plan. Property taxes and costs incurred with an investment are likewise subject to limitations. You may find more information about charity deductions in IRS Publication 1771, available online.
You will be required to submit your books and records, such as QuickBooks or any other accounting system, receipts for spending, and applicable bank and credit card statements, as well as any other necessary documents. Preparing Tax charges less for their services because the more structured your records are, the less time it will take them to file your taxes.
Compile Your Details
You need to provide your Social Security number and your spouse’s Social Security number if filing jointly. If you were self-employed in the previous year, you’d have to provide your Federal Employer Identification Number.
Tax return information is serious business. The IRS will likely analyze any discrepancies in your tax return, especially if you made an error. This is because it’s essential to ensure your tax return is accurate and complete and minimizes the likelihood of the IRS having to correct your return.
This is especially important if you’re self-employed. When preparing your tax return, it’s in your best interest to organize your books and records, so your tax return is as accurate as possible.
Retrieve a Copy of the Previous Year’s Preparing Tax Return
Before you begin preparing your tax return, make sure to retrieve a copy of your previous year’s tax return from the IRS. You’ll need it to calculate the cost basis of any capital gains or losses you may have incurred throughout the year. Additionally, you may be able to use this to ensure that your identifying information, such as your Social Security number, is current.
Selecting a Tax Preparation Professional
Unless you are confident that you can accurately prepare your tax return, it’s in your best interest to hire a professional to do so. Hiring a tax preparation professional means you’ll need to allow enough time before April 18, 2022.
It’s a good idea to start preparing your tax return at least three months in advance if you’re planning to submit a paper return. If you’re planning to file electronically, you may be able to submit your tax return as soon as you receive your W-2 and 1099 forms.
Conclusion
Preparing your taxes may be a stressful endeavor, but it doesn’t have to be. By following a simple checklist, you can easily organize your tax return. You can even save time and money by hiring a tax preparation professional to file your taxes for you. Tax preparation professionals typically offer a variety of services to suit your needs.
If you are looking for the best professional tax software, Keystone Tax Solutions has you covered. Reach out to us today to learn more about our software, or try a free demo now!
