Tax Preparation Tips for the End of the Year

Tax Preparation Tips for the End of the YearAs the end of the year approaches, there are steps you should begin taking to make the tax season a little less stressful for you and your accountant or bookkeeper. These steps can not only make it easier on your tax preparation services, they can help reduce your tax liability. Whether you pay individual income taxes, business income taxes or both, here are some helpful tax preparation tips you can use.

Schedule Your Appointment Now

The closer you get to April 15th, the more likely your accountant is be assisting many other clients, all whom will be vying for his or her time. To avoid asking your asking yourself, “Are there other tax services near me?” or “Who else provides quality tax preparation near me?”, you can get a head start and book an appointment with your CPA or tax accountant now to ensure that he or she will have allotted enough time to complete your taxes.  

Compile and Organize Your Records

When it is time to see your tax services professional, you want to be able to have ready for review all of the documents he or she may need to complete your individual or business taxes. Take the time now to gather and organize your tax-related documents. For individual income taxes, these can include:  

  • Receipts
  • Cancelled checks
  • Bank and brokerage statements
  • W-2s and 1099 forms

If you own a business, taking stock of your business expenses will be a lot easier if you have been keeping track throughout the year. However, if you haven’t, the end of the year before the rush of the new tax season is the perfect time to get your records in order. This can entail:

  • Entering information into your accounting or bookkeeping system
  • Getting records from your payroll services company
  • Linking receipts with the appropriate purchase orders and invoices

Evaluate Your Estimated Payments

If you send in estimated tax payments to the IRS every quarter, you should compare the total amount of those payments to your end-of-the-year income numbers. This can give you an idea of the amount of refund you can expect or tax balance you may owe. If there is a sizable difference between the two totals, you may be able to make up some of the difference with the fourth quarter payment, which is not due until January 15th of the next year.

Take Advantage of Last-Minute Deductions

If you are anticipating a large tax bill next year, making a donation to a qualified charity is a way to do some good while reducing your individual or business tax liability. In addition to donating money, you can get a deduction for appreciated stock as well as the fair market value of donated items, like clothing, furniture and toys. In order for items to be deductible, you must have owned them for at least a year. It is important to maintain all receipts and related documents to be able to verify your claim.   

When it comes to getting your individual or business taxes in order, you want to avoid waiting until the last minute to get ready. Taking the time before the new year begins to get organized and prepared before the tax season arrives can help reduce tax-related stress and can help save you money.