8 MUST READ Tax Preparation Tips

income tax hell
  • Procrastination Costs Money – Many individuals put off filing their taxes until the last-minute, but waiting may be costly. The pricing of tax preparation services often increases as filing deadlines approach. Disorganized late filers may pay late fees, miss key deductions or make costly mistakes.

 

  • Documents – If you do not have adequate documentation to prove your deductions are legitimate you could end up in hot water. Do not claim anything you cannot back up with documentation. Save copies of your return as well as all the receipts and other documents you use to prepare your taxes. You may need them in the future.

 

  • Select Professional Preparers Carefully – Professional tax preparation can be invaluable to businesses and individuals with complex personal finances. If you decide to utilize a professional tax preparer find someone you can trust and always make sure they sign the return.

 

  • Online Filing – Online tax preparation and filing is quickly growing in popularity.  You may be eligible for free online filing if you meet certain income requirements (learn more U.S. and Canada).

 

  • Direct Deposit – The IRS and Canadian Revenue Agency (CRA) offer direct deposit for refund payments. The earlier you file the faster you can get your refund via direct deposit.

 

  • Security – Whether you file online or use a professional you must keep your personal information safe. Tax returns are a goldmine for identity thieves. Never store sensitive information on public computers or transmit financial information through unsecured Wi-Fi. Also, keep paper copies of your return in a safe location.

 

 

  • Check Your Work – No matter how you prepare your tax filing you should always double-check the work. Compare your current return to last year’s. Unless you have experienced major financial changes your refund or the amount you owe should be similar to the prior year.