Paying taxes is an annual event that we cannot avoid. As the end of the year draws near we all start to get a little stressed about how to save as much as we legally can.
The first plan of attack is to set an appointment with one of our tax professionals. Research shows that a large percentage of tax payers do use a professional for the peace of mind we can bring. But, you also need to come to your appointment prepared with the information that we’ll need to file your taxes.
Here are three things to keep in mind.
- Organize: Plan on keeping receipts throughout the year, preferably in one location so that they are easy to put together for your tax appointment. Without them you cannot legally claim deductions.
- Ask questions: As a professional tax preparer we are aware of potential deductions, credits and exemptions that are available for you. New tax laws come into play each year and we pride ourselves on staying up to date on what is available.
Examples
a. Deductions = a reduction of the income subject to tax. Personal (charitable gifts) Business Expenses (ordinary and necessary to do the business)
b. Tax Credits = is a sum deducted from the total amount a person owes to the state. Such as property tax, children or school expenses.
c. Allowable Exemptions = number of personal, dependable, and other exemptions that you claim on your W-4.
4. Check Options: You have the option to file your taxes individually or jointly. Usually filing jointly is the best case scenario, but not always. It should be discussed how each option will affect your return and compare the results. Sometimes individually could save you money, such as if one person has a lot of high deductions ie; medical expenses.
Keep in mind that it is never too early to get organized and ready for the end of year tax season, and we are sure that our tips above will help to alleviate some of the stresses.
Need help figuring out your credits and deductions for 2012? Contact us today!