10 Easy Tips for a Stress-Free Tax Season
By Allyssa Klingberg
Read Time: 4.5 min
The tax season can feel stressful at times with all the overwhelming amount of information one sifts through and all the different deadlines for different forms.
But the tax season doesn’t need to be overwhelming when you have the best resources and people around you!
We want to be some of those people for you this tax season, so we put together a list of 10 tax tips that you may find helpful.
1. Don’t procrastinate
Hastily trying to meet the filing deadline may cause you to overlook potential sources of tax savings and could increase the risk of errors. Getting a head start will not only keep the process calm but also mean you get your return faster by avoiding the last-minute rush.
2. Gather your records in advance
Making sure you have all the records you need in advance can help ease tax season stress. It also makes it easier for your CPA or tax preparer to file as quickly as possible.
Making sure that all of the correct information is reflected on your tax returns can definitely help to minimize chances of unwanted IRS questions. If you receive something and are unsure if it needs to be sent to your preparer, send it to them anyways!
3. Choose the right preparer or CPA for your needs
Not all preparers are familiar with filing returns for ministries or ordained staff. Doing just a little research to find the right preparer for your needs can mean a world of difference in the filing process!
4. Choose direct deposit
Choosing direct deposit is the safest and easiest way to file an accurate tax return, and the fastest way to get a refund!
5. Report all income, assets, and legal entities
Income
Any taxpayer is required report their income from all sources, whether that be Forms W-2, Wage and Tax Statements, and Forms 1099. Usually any other income can be reportable as well, even if the taxpayer does not receive a statement. Make sure to ask your preparer about this!
Real Estate
If you bought or sold any property in the last year, it’s important to let your preparer know! This is to ensure that all your costs are accounted for correctly, a really easy way to be sure of this is to send a copy of the final settlement statement. This will help your preparer capture all of your potential write-offs.
Legal Entities
When owning a business, it’s important to record any major changes that can have a significant impact on how your taxes are filed! Whether you just started owning or operating your own small business, are dissolving one, or merely changed over ownership to someone else these are all important to pieces in filing your return.
6. Report unemployment benefits
According to the IRS, anyone who received unemployment benefits will need to report the amount received. The reason for this is that it is typically taxable income just as all other income may be. Be sure to check with your preparer on how to properly report these benefits on your Federal and State returns!
7. Don’t Panic if you can’t pay
If you can’t immediately pay the taxes you owe, consider some stress-reducing alternatives! You can apply for an IRS installment agreement, suggesting your own monthly payment amount and due date, and getting a reduced late payment penalty rate.
You also have various options for charging your balance on a credit card. There is no IRS fee for credit card payments, but the processing companies charge a convenience fee.
8. Request an extension if needed(but pay on time)
If you need more time to get your return prepared, you can get an automatic six-month extension. However, the extension itself does not give you more time to pay any taxes due. You will owe interest on any amount not paid by the April deadline, plus a late payment penalty if you have not paid at least 90 percent of your total tax by that date.
9. Only send copies of forms to preparers
It’s important to make sure you keep all your original documents on file and only send copies of all forms to your preparer, or anyone else who may need them.
The reason for this is that, you never know what may happen to your documents when with someone else. They could get lost along the way and you may never see those files again! Many choose to mail over copies, fax them, or share them via a file hosting service like Dropbox.
10. Major life changes
Many things can happen over the course of a year, so if any major life changes happened in the past year, be sure to let your preparer know before they start filing your taxes!
These life changes come in all forms, whether it’s a marriage, a new born, or a grown child moved out. These are all important to how your return may be prepared. If you’re not sure what may be considered a major life change, you can always ask your preparer if any of your life changes may fall under this area!
A partner you can trust
You are not alone in this journey. Each year we serve hundreds of pastors, just like you, with their personal income tax returns through our minister's tax service. Our team of CPAs understand the many benefits available for minister’s taxes. If you have pressing questions, give us a call at 877-494-4655 and ask to speak with one of our helpful specialists. We would love to find out more about how we are able to serve you.