As the tax season approaches, both individuals and businesses have a habit of writing off every deduction they feel fits their situation perfectly. No one likes paying more taxes than they absolutely have to and, sometimes, this can lead to problems. People should be extremely cautious about the deductions they are claiming because a small mistake in the calculations or reading of the tax law can lead to big problems in the future. Every year, a number of businesses and individuals are audited because of problems in their tax filing and payment.
By following some simple tips, this can be avoided and you can have a fuss free tax season –
Honesty Pays Off, Literally – Individuals and companies, no matter how honest they have been all year round, tend to slip into the tax gray area around the season of paying taxes. They want to claim a lot of deductions and while some deductions might be permissible, they can affect the integrity of the taxpayer. This is especially true in case of companies operating on a small scale. You don’t want to come under the radar of the IRS by claiming deductions via loopholes in the law. Instead, keep your accounting as clean as possible and the less complicated it is, the better it would be for you and your business. After all, if you do get audited, all your tax savings could go down the drain.
Hire An Accountant – Companies are more agreeable to hiring accountants but, for some reason, individuals feel like they can file their returns on their own without any help. Unless someone is an expert, it is never recommended to do this one, professional job without hiring an actual professional. Accountants are known to ease the filing process and in a lot of cases, they can actually point out areas where tax could be saved. They also help to avoid mistakes that can prove to be quite costly in the future. Finding a good tax professional is easy if you know someone who already has one they are satisfied with.
Be Organized – Gone are the days of receipts and books of accounts were maintained in hard copies. With the large number of software programs out there, being organized is not a problem anymore. Start with a simple cloud filing system where you can put in all your receipts of the year. If you are organized, tax filing would also be a breeze for your accountant. If you want an accounting software program, you can ask local vendors or use the tried and tested free programs that are available for individuals and small companies.
With these simple tips, you would realize that the tax season isn’t as scary a monster as it is made out to be by others.