IBA SUCCESS MAGAZINE Volume 3 Issue 1 | Page 47

IRS. gov is the source for the best and most accurate information. As a business owner, you should review the IRS website periodically for any changes or updates that may affect you or your business.

Google“ Self-Employed Tax Tips.” Education is key for tax success. Don’ t just rely on your preparer. By being proactive with your tax matters, you can verify that your tax professional has all of the information needed to get your maximum return. This is also a great way to determine if you have the best service provider. If your search for information reveals new updates, laws or rules that your preparer is not aware of, you might want to interview other tax professionals.

Recordkeeping is key to smooth tax preparations. Be sure to maintain impeccable records. Keeping an accurate log of all transactions and deductions can only benefit you when filing your taxes. If you are experienced in Excel, a spreadsheet would be a good place to keep a proper log. Other options could be using basic accounting programs like Quicken or QuickBooks, which can help you keep track of your expenses and provide multiple reports in various forms.

Another good rule of thumb would be to open a separate checking and savings account just for your business. The checking account should be used for all business income and expenses; this cuts your tax preparation time in half. The savings account is important to put away the estimated tax amounts that you will owe for the year.

The above self-employed tax tips will definitely make your life easier when getting your taxes prepared for your business. The information that is necessary for proper filing can be a lot to keep track of. Bookkeeping and accounting services are essential for small businesses. Allowing the professionals to focus on what they are good at will not only create a hassle-free tax experience, it will also guarantee accuracy and allow you to focus on running and growing your business.

For Individuals:

Many Americans are resorting to preparing their own federal and state tax returns, and even more individuals utilize tax professionals. Whatever decision is made, there are important tax tips that everyone should be aware of:

Tip # 1

A W-2 or 1099MISC is needed to prepare federal or state returns. The IRS states that all employers must have filing forms mailed out by the 30th of January; therefore, taxpayers should receive their W-2 or 1099MISC forms before February 15th. In the event forms are not received by that date, it is recommended that you first contact the employer to verify the mailing address. Many employers also provide Internet access to retrieve forms online.

Tip # 2

A popular tax tip to consider is checking the tax deductions that are available to taxpayers. It is estimated that many taxpayers lose millions of dollars yearly from tax deductions that they were entitled to but failed to claim. A professional tax preparer invests in the knowledge, software and updates that guarantee individuals all of the tax deductions they qualify for. When an individual takes on the role of preparing their own taxes, he / she is most likely missing tax deductions that may increase his / her refund check. To prevent losing money, it is wise to either invest in the proper knowledge or hire a tax professional.

Tip # 3

Our final tip for individuals is to file on time or file an extension prior to the deadline date. If you believe that you owe taxes but can’ t pay them immediately, don’ t delay your filing. There are payment plan options to assist with the debt owed. One of the biggest errors that taxpayers make once they realize funds are not available to pay taxes is to not file a tax return. Many people believe that not filing a return will prevent a debt from being owed, but this belief actually makes your situation worse. Taxpayers have the option to file an extension; however, the estimated amount of taxes owed is still due on the traditional tax deadline. Therefore, keep in mind that the IRS will impose a number of late fees and penalties on tax payments that are not received in time. Ignoring the IRS is never a good idea and may increase the amount of penalties and fines for the year.

These helpful tax tips are just a few of many that individuals should be aware of prior to filing. The above tips will also assist in reducing the amount of money that could be owed or increase the amount due back from the IRS. There is never a reason to pay late fees or lose money due to you. Have a happy tax season and remember, April 15th is the deadline to file, or late fees and penalties may be assessed.