When tax time rolls around, many businesses owners’ stress rises sharply. Navigating the sea of taxes, exemptions, regulations, deadlines and compliance can be a headache for the inexperienced. So, tax season tips can help you figure out the best way to manage tax and maximize refunds.
Many business owners use online money management tools to better manage expenses and investments. Using these tools while following the basic principles of personal finance can ease the pain of filing taxes – this year and next.
Below we are giving some useful tips for filing taxes for the first time:
Start Planning Now
Filing taxes is one of the most important tasks for the first time and every year. It should be filed before the last day to avoid penalty. You don’t want to put yourself in a rush to file your tax return because you’ve decided to wait until the last minute.
Now’s the time to start thinking about what you’ll need to do to file your taxes. Here is a checklist that everyone will find useful:
Step 1: Collect Personal Information
The most important step is to collect your relevant information about yourself and your family. Personal information includes your date of birth, Aadhar card and PAN number. Next, your spouse details and dependents details are also mandatory (for USA).
Step 2: Decide how you will file your taxes
Here you can start in two ways, first, if you have expertise in this field you can go on your own using one of the many software options available, and second, you can take the help from professionals if you are short of time or lack of experience.
Step 3: Collect Income Documents
If you do not have important financial information at your disposal, you cannot file your taxes. Over the next few weeks, you should start receiving paperwork from your employer and other financial accounts in your name.
Other income information you’ll want to start collecting may include:
- Investment income.
- Rental property income and expense.
- Social Security benefits.
- Individual Retirement Account distribution.
- Miscellaneous income (jury duty, scholarships, gambling winnings).
Step 4: Collect adjustments to your income documents
No one really likes to pay taxes, so people start looking for necessary ways to reduce their taxable income. To do this, you will need to collect income adjustments. These may include some of the following:
- Student loan interest.
- Moving expenses.
- Medical Savings Accounts contributions.
- Self-employed pension plans.
- By collecting the above information, you will reduce your tax burden and also increase the size of your refund checks.
Step 5: Start looking at credits and deductions
The Income Tax Department has several tax credits and deductions that you can claim. You’ll want to start looking at these so you get an idea of which ones can help you save money.
So, let us have a look at the e-filing methods suggested by your tax professionals to get maximum tax refund
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