Winters are harsh, and just as you step out of your home on the first fine days of spring, you realize that it is tax season (rest assured, every tax professional is ready). You grumble and have a fit because your tax planning has been far from great. Now, even though tax season arrives around the same time every year, we seem to find ourselves completely at a loss as to where to begin the process of filing our taxes on Uncle Sam.
This season may be different, however, as you've started to consider hiring a tax planning professional to help organize your financial situation at least a little bit more. The problem is, you may never have worked with a tax planner before, so where do you start? You got so used to the idea that while your tax work wasn't perfect, it was at least free. Now with an investment in a pro tax service you are wondering if this is the right idea.
Here are five reasons why finding the right tax professional isn't just a smart move, but can save you a lot of money:
1. Provide information about your income – You should be able to provide detailed information about the income coming into your home. This includes you and your spouse. Keep in mind that you must also report income from secondary jobs as well as investments. What's great is that your tax professional will show you where you can actually add deductions to your taxes, which means more money in your pocket.
2. Account for your banking transactions – A tax professional can take your bank account information, individual accounts, or joint accounts, and let you know where they belong on your tax return. No more guessing games because inconsistencies can lead to audits later.
3. Record Your Deductions – Deductions are classified into two categories (ie utility bills, mileage, office supplies). or non-commercial (i.e. property taxes, student loans, charitable donations), and your tax guru can help you see if there is any money out there. You miss.
4. Have the tax documents ready to go – Sometimes you will be asked to provide pay stubs, past income tax returns, investment records, and pension information. This level of detail is essential because the good tax professional will demand no less. It's all about your accountability for the process.
5. Don't expect immediate answers and numbers – Your tax professional should be able to assess your financial situation, and it takes time. They need to cross the numbers to find out what kind of money you might owe the IRS. Plus, they may actually be able to view your tax history and see if there is any money owed to you.
Even if this is the first time you have worked with a tax professional, remember that this is a step that it is never too late to take.