One of the best ways for taxpayers to make this potentially atrocious time, in wake of the new Republican tax plan, less stressful is to start preparing now.
Tax and accounting professionals say the end of the 2017 tax year is ideal to begin gathering whatever is needed to have a smoother tax-filing experience for the upcoming tax season. Taking that action can help individuals and entrepreneurs file taxes on time, accurately, and more efficiently.
Some 20% of taxpayers wait a week before the deadline to file taxes, according to the IRS.
Other beneficial reasons to file early may help you eliminate penalties and interest fees if you owe taxes, increase your ability to get a refund faster, and boost your chances of the getting the utmost amount of financial aid if you have children in college, experts say.
“If you wait until the last minute to file, you can miss potential tax-saving opportunities due to time constraints and lack of organization,” says Steve Pelmore, tax services manager at Hoskins & Company, a black-owned CPA firm in Nashville, Tennessee.
Pelmore offered year-end tax tips for individuals and business owners to consider:
Organize records and contact a tax professional.
All taxpayers should be organizing their records and reaching out to a tax professional for specific guidance based on their situation.
Review donations to non-profit groups.
Review cash and non-cash donations to not-for-profit organizations. Making an end-of-year donation may lower your tax liability if you are able to itemize.
Examine money contributed to retirement accounts.
Review the amount of money contributed to your retirement accounts. If you have not reached the maximum contribution amount, consider making an end-of-year contribution to potentially lower your tax liability.
Business owners: Look for ways to reduce your tax burden.
If you a business owner generating a profit and you are considering equipment purchases or upgrades, you may want to consider making those investments before Dec. 31, 2017, to potentially receive tax benefits for this year.
See what tax breaks a year-end bonus may bring.
If you are expecting an end-of-the-year bonus from your employer, consider putting it into your employer-sponsored retirement account or other deferments such as an employment stock purchase program if offered by the employer. These alternatives will potentially allow you to grow the funds and defer the tax implications to future years.