Getting prepared to file your tax returns can be stressful especially if it is a last minute spur of the moment thing. People who have no trouble filing there returns usually spend the full year getting prepared for it by preparing all the documents necessary to file the return.
Therefore what you need to prepare for before filing tax returns:
- Collect all the necessary information and documents such as receipts and invoices well before you need them for filing the return
- Stay up to date on tax legislation that will affect you – especially new taxes or change in tax rates or tax deductible status
Consult your employer regarding taxes paid on your behalf or double pay – or not realise that you are entitled to a tax refund
- Freelancers should clarify if taxes have been deducted from payments due to them and obtain documentary proof that such taxes have been remitted to the tax authorities.
- Consult a tax advisor if you have trouble previously when filing a return
- Get ready to be audited – Assume that you will be audited and have all the documents ready indexed and summarised this will ensure that the process will be stress free.
- Tax deductions – ensure that tax authorities have not changes tax deductions and basis for qualification for deductions.
- Obtain a checklist from the Inland Revenue regarding what has to be done before filing these checklists are useful as the procedure and due dates may change annually
- Correct forms – verify that you obtain the correct forms from the inland revenue as the format of the forms change from year to year
- Clarify doubts – if the forms are unclear please contact the inland revenue and clarify any doubts rather than filling out incorrect information – which could lead to penalties
- Tax status – your tax status may change during the year especially due to marriage, starting a business, moving to a different state etc you may be required to inform the tax authorities in your State regarding these changes
- Foreign income and assets – the IRS has made special efforts to investigate foreign income and assets and to impose penalties – so it is important to declare your foreign income and assets in the return.
- Keep copies of all the documents that you are submitting even is your submission is online – its easy for files and records to get lost. Also ask for proof of receipt from the tax authorities to ensure that they acknowledge receiving your return.
- Tax refunds – follow up with refunds and send regular reminders to the authorities regarding pending refunds if there is any delay.