Taxes, Taxes, Taxes!

It’s tax season! *Cue dreaded sigh* Tax season typically means it’s time to go through that massive stack of papers and start preparing your return. Keeping track of your annual income and expenses can be a stressful burden. With all the craziness this past year has thrown our way, don’t let this tax season and the IRS throw you any curveballs. It’s time to get organized. Here are a few tips to help you get through this year’s tax season stress-free.

Start by getting organized. 

If you don’t already track your paperwork in LifeHound, get all your information in one place. Ensure all the forms you have filed are completed accurately, ensuring there aren’t any typos or mistakes. Ensure your EIN numbers, social security numbers, and all other identification forms are accurately stated. Be sure to store all forms, invoices, and receipts in the same place. 

Keep track of things all year long

Tax season typically sneaks up on people. As the year goes you should be keeping all tax-related items together in either a file folder or folder on your computer. And we know, that can be overwhelming to find if you haven’t been doing so the entire year. It’s important that you start now so you’re already ready for next year’s tax season. 

After this last year, the line between business and personal expenses is blurrier than ever. Be diligent about tracking your expenses when they happen and be prepared for the IRS to pay close attention to those write-offs!

Avoid too many deductions.

Vehicle expenses, adoption credits, and home office deductions are all important deductions to consider, especially after this past year. If you are claiming excessive/unrealistic deductions that are disproportionate to your income and expenses claimed by others, it may attract IRS attention. Ensure all your deductions have documentation to back them up, and that documentation is stored in an organized manner. 

If you are a business owner, prepare W-2s and 1099s

As a business owner, you pay and withhold taxes from your staff all year. If you haven’t already provided your employees with their tax forms, you need to do so as soon as possible. 

Keep track of large charitable donations

 Charitable donations are a great way to help your community and receive tax deductions! Be careful about the size of your charitable donations, as a donation that seems too large for your income bracket can attract IRS attention. Non-cash deductions over $500 require Form 8283, be sure you have all the forms required for your specific donation. 

Tax season can be a breeze when you take steps to remain organized and prepared. LifeHound offers a one-stop-shop for all your tax season needs. Store, track, and update your forms and important documentation, so if the IRS does come your way, you’re ready. Sign up for free! Start your organization journey, and give yourself more time to enjoy your life!