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It's important to consider the strong benefits of preparing for the tax season early. Some simple organization for your taxes can save you time, money and frustration this tax season. Here are a few tips to consider as we enter tax season:
1. Organize your 2016 expense sheet and prepare to keep good records for 2017. Whether you keep track of your payments through a ledger, a notebook or accounting software, prepare 2016's expenses sooner rather than later and use a clean sheet for 2017. Remember that any deductibles from December should be recorded before they are misplaced. Lovette CPA suggests you record expenses, rather than rely on bank statements. This is particularly important for expenses late in the calendar year.
2. Consider an earlier refund. You can receive a refund faster by filing your taxes early. Last year, around 111 million out of 152 million returns resulted in refunds for the 2015 tax year. The average refund for the 2015 tax year was $2,857. If you are waiting for your refund, you can track it with the IRS website "Where's My Refund?"
3. File on time to save money. Filing your taxes on time can save you money. The IRS penalizes individual late filers and calculates penalties and interest on a case-by-case basis. There is no penalty for filing late if you are getting a refund although, if you do not claim your tax returns within three years, the money is forfeited to the U.S. Treasury. Filing extensions and paying any owed taxes will not be penalized either. A late filing penalty applies if you owe taxes and did not file a return. Late payment penalties are 0.5 percent of what you owe in taxes. For every month you don't pay the tax, the percentage you owe increases.
4. Start early to reduce or eliminate errors. Perhaps you noticed a trail of errors the last time you filed your taxes in a rush. Those can be avoided or corrected easily by filing early. There are common errors in many people's previous tax returns. They include incorrect Social Security numbers, incorrect filing status and failure to claim credits or deductions. Filing early gives you time to review your form and edit any mistakes before the filing deadline.
5. Misc. If you're self-employed If you are self-employed, paying taxes is different, as you will need to send quarterly estimated tax payments. If this is your first time being a self-employed taxpayer, seek help from the professionals at Lovette CPA. We will help you figure out how much to pay and what to deduct without being penalized.
With more than 20 years of experience, Lovette CPA, P.A., is a true business resource, offering a wide range of services to individuals, families and businesses of all sizes. We have locations in Greensboro and Raleigh. For more information, call us at 336.346.1960, visit our website, www.lovettecpa.com, or e-mail firstname.lastname@example.org.