Posts Tagged ‘tax’

Bookkeeping Tips: Tax Preparation Checklist

April 1, 2011

It is that time of year again and it is so important to have a plan in place when you file your taxes. You may need to consult with an accountant or bookkeeper. You may need to inquire about which deductions are the most advantageous for your situation. You may need to make sure you are not missing important pieces of paperwork. The simple tax preparation checklist below will get you started and on track.

1. Do you have copies of your W-2’s or 1099’s? There may also be additional paperwork related to investments of any kind that must be filed. If you are not sure ask an expert. .

2. Don’t wait until the last minute to schedule time with your accountant or bookkeeper. This time of year is crazy for people in the financial industry and you will want to make sure they have time to assist you. Last minute pressures can sometimes lead to hasty decisions.

3. Keep up on any tax credits you can take advantage of or ask an expert. New tax bills are always being passed and it can be confusing. The IRS website is a great resource for helping you stay up to date on the current tax laws. Of course there is no substitute for hiring a trustworthy accountant to stay on top of all the details.

4. If you are a W-2 employee there are deductions you can take advantage of. Ask your accountant about these and what you need to do. If you are self-employed there are a wide variety of deductions that can work for you. Be sure and keep all business related receipts and ask your accountant or bookkeeper what expenses can be used as deductions.

5. Compare itemizing your deductions vs. not itemizing them and see which scenario provides the best result for you. Again if you don’t know how to evaluate this then hire an expert.

6. Double check any exemptions you are claiming.

7. Check your eligibility for tax credits such as the child tax credit, adoption credit, education credits, etc.

8. Will you file electronically? Make sure you have everything you need in order to do so.

9. If you are a business or self-employed be prepared to make your tax payments on time.

10. Have a massage or night off planned once your taxes are done! Nothing is complete without a celebration. Enjoy that fact that another year has gone by and you have managed your finances.

Happy tax season!