Every year, an individual with a job or earning income to any
means is required to report and file their income for taxation purposes.
Taxpayers are required to file an income tax return on or before April
15 of the current and year and the period from January 1 to April 15 is
given for tax preparation. As a taxpayer, you should be familiar with
tax law and how to correctly file your income tax return. Here in this
article are some steps on preparing for tax:
First is to collect all necessary documents such as W-2s for employees earning compensation income and 1099s for investors. Make sure to check these documents closely for any discrepancies in the amounts stated and with what you have actually earned. To add, check the accuracy of all withholding amounts. If there are any errors and discrepancies, inform your company's payroll or human resources department.
Next is to collect copies of all your financial statements and other documents or receipts that can be used as proof of your income and expenses. These can be used when computing for total deductible items from your taxable income. When going through your deductions, go through every item very carefully so that you might not miss any significant allowable deduction.
Generally, all work or business related expenses are deductible. Health and medical expenses may also be deductible, as well as union dues if you are a member of a union. Also, you might want to organize Social Security information of all of your dependents as it will help in determining additional exemptions from your dependents that you may avail of. Children under the age of majority, either natural or adopted, may be qualified as dependents. With all of these allowable deductions, you can lessen your tax liability legally.
Lastly, you might want to review your income tax return again and check for errors and discrepancies not only in the income section but also in the deductions section. Make sure that you and your accountant check your tax return for the previous year as it may contain any tax due or refund, withholding and tax loss carry forward information, and other information on the treatment of certain income and deductible items. Keep your tax returns for at least 3 years in case of an audit and also, other beneficial information for this year's return can be found on previous year returns.
First is to collect all necessary documents such as W-2s for employees earning compensation income and 1099s for investors. Make sure to check these documents closely for any discrepancies in the amounts stated and with what you have actually earned. To add, check the accuracy of all withholding amounts. If there are any errors and discrepancies, inform your company's payroll or human resources department.
Next is to collect copies of all your financial statements and other documents or receipts that can be used as proof of your income and expenses. These can be used when computing for total deductible items from your taxable income. When going through your deductions, go through every item very carefully so that you might not miss any significant allowable deduction.
Generally, all work or business related expenses are deductible. Health and medical expenses may also be deductible, as well as union dues if you are a member of a union. Also, you might want to organize Social Security information of all of your dependents as it will help in determining additional exemptions from your dependents that you may avail of. Children under the age of majority, either natural or adopted, may be qualified as dependents. With all of these allowable deductions, you can lessen your tax liability legally.
Lastly, you might want to review your income tax return again and check for errors and discrepancies not only in the income section but also in the deductions section. Make sure that you and your accountant check your tax return for the previous year as it may contain any tax due or refund, withholding and tax loss carry forward information, and other information on the treatment of certain income and deductible items. Keep your tax returns for at least 3 years in case of an audit and also, other beneficial information for this year's return can be found on previous year returns.
If you are planning to hire a reliable tax preparer in Sacramento then you must check out Capital Tax Services Inc today!
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http://EzineArticles.com/?expert=David_YaffeeArticle Source: http://EzineArticles.com/7507725
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