Most of us approach taxes as something to put off thinking about until absolutely necessary. Most people want to lock up the part of their brain that deals with taxes until it needs to be brought out again next year. However, with a bit of forethought and preparation, you can make next year’s taxes go much more smoothly.
Fibrick Financial Services in NYC will work with you to guide you through with proper tax season tips to make the upcoming tax season as smooth as possible. They will also advise you on key accounting processes to complement their strategic financial and operational objectives.
Tax Season Tips
This is perhaps the most important step. It’s a simple matter of setting a system of organization and sticking to it.
Even if you do not get a single write-off for receipts, it is well worth your time to keep them – and keep them in logical order. The easiest method is to simply buy a notebook and a pack of stick glue. At the end of every day, write the date at the top of the page and glue the receipts in a vertical column. This allows you to find any receipts if they do become eligible for tax purposes. For example, the computer you buy in March could become a deduction if you launch a home business in December, but not if you don’t have a receipt.
Pay Stubs and Invoices
When you end up paying an unusually large tax bill or receiving a large return, you need to find out what caused it. Usually, you’ll find that the withholding was off all year, but that doesn’t help you when the bill comes due.
An easy way to avoid this is to track your income and the tax that comes off on a monthly basis. This information will be right on your pay stub. It’s just a matter of putting it into an Excel file and comparing it to the tax bracket and rate you should be paying. This will prevent any nasty shocks, as you will be able to adjust withholding early to avoid a larger, year-end discrepancy between what you should have been paying and what you were paying.
You simply need to file a new W-4 to make changes. There are also life changes that should automatically prompt you to file a new W-4, such as a marriage or purchasing a home.
Plan Your Deductions
There are all sorts of deductions for taxpayers, but too often we miss them by leaving things too late. For example, Christmas often gets people thinking about charitable contributions, but it also happens to be the month when spending on gifts eats up free cash. Instead, plan to give on a set schedule, whether monthly, quarterly, bi-annually – basically, whatever works for you. The same reasoning applies to all deductions that depend on a purchase or some action on the part of the taxpayer. This gives you a more realistic chance of actually claiming a deduction rather than merely planning to claim one.
Plan Your Investments
Taxes are a consideration when investing, even though they shouldn’t be the most important consideration. If you are already in the market for stable income investments or even just saving up for retirement, do of course consider the tax advantages of certain approaches. Tax-deferred 401K can help you sock away extra for retirement and reduce your taxable income now as a bonus.
Study Last Year’s Taxes
The best thing you can do to make next year’s taxes easier is to study last year’s taxes. Reviewing your tax return for missed opportunities will prompt you to be more aware of how your actions can impact your taxes.
These tax season tips will go a long way to get the best filing and possible reimbursement possible. For residents or businesses in NYC, trust the team at FiBrick Financial Services if you need accounting services in NYC. We are committed to providing quality accounting services to our clients at the highest levels of integrity at affordable cost.
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1 (646) 242-3326
The team at FiBrick Financial are the experts in accounting. If you are have questions about our many other services including: quickbooks, bookkeeping, consulting, business tax preparation and financial projections and live in or work in NYC, Manhattan, New York or New Jersey, contact FiBrick Financial Services at: 1 (646) 242-3326.