Tax preparation is more than a yearly ritual – it’s a strategic financial move that needs to be approached with foresight to help you save money. But navigating the complexities of tax filing is no easy feat. This is especially true for individuals that have sold property and made capital gains, traveled between states for business purposes, and more.
At Fusion, our CPAs have helped thousands of individuals – with different financial portfolios – submit accurate tax returns and save money while doing so. We believe in empowering individuals with knowledge while offering solutions to ease the process. In this article we take a look at essential tax preparation tips to help you prepare for a smooth tax filing process.
5 Tips to optimize your tax preparation process
A good tax preparation process ensures financial clarity, minimizes stress, and maximizes opportunities for savings. Follow these steps to prepare well.
1. Organize your financial documents
The first step to a stress-free tax season is an organized stack of documents. Ensure you have all your W-2s, 1099s, and relevant receipts on hand. This will help you sort through information easily and aid in submitting accurate figures to the IRS. At Fusion, our CPAs can guide you to create a system that streamlines this process to save you time.
2. Understand tax deductions and credits
Tax deductions are expenses that you can subtract from your total income to reduce your taxable income. These deductions can include various items such as mortgage interest, charitable contributions, medical expenses, and business expenses. It would be beneficial to study your expenses and note those that may be eligible for deductions as you prepare to submit your tax return. You can consult with one of our experts if you are uncertain about the tax deductions you may be eligible for.
3. Consider profits from capital gains
Capital gains, the often-overlooked player in the tax game, can significantly impact your financial obligation to the IRS. If you’ve received gains from investments or sold property in the tax year gone by, your profits may be subject to tax. Consult with our CPAs on the nuances around reporting capital gains. We can guide you through strategies to minimize your tax liability.
4. Consider multistate tax liabilities
Tax laws are ever-evolving, and staying informed is key. Different states tax different types of income. This means that if you perform work other than in your home state you may be liable for tax payment to that state. The same goes for residency. If you travel between states frequently, it is important to know that most US states have a threshold for the number of days you are allowed to stay within their state without paying residency taxes. Determine your residency status in each state to discover your tax obligations as you prepare your tax submission.
5. Ensure Timely Submissions
Being proactive and well-informed about the tax requirements can help individuals manage their obligations effectively. If you have a complicated tax situation or simply need reassurance to submit accurate taxes to the IRS, you can benefit from consulting with a tax professional.
As part of your tax preparation strategy, save these important tax dates on your calendar:
Estimated quarterly tax payments are due on April 15, June 17, September 16, and January 15.
At Fusion, we aim to ensure compliance and optimize your tax strategy if you have a multistate tax scenario. We have saved many clients money by maximizing their tax deductions and credits. Contact us for assistance today!
This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.