Year-end tax tips can help save you a lot of headache next tax season. If you struggle with tax filing, you’re not alone. Every year, as many as 33% of Americans file their taxes late.
Some just forget, others struggle to get things together in time because they left it to the last minute, and others are scrambling to make sure they have everything they need to keep their bill low.
It’s not too late to make sure you have everything you need to get through tax season without a hitch. Here are our best year-end tax tips to keep in mind:
1. Keep All of Your Records
You should have been saving your account records all year, but now’s the time to make sure they’re up to date. It will be handy when discussing your taxes with your accounting services because otherwise, you might have to spend days looking for records that they need.
When you think your taxes are filed away, forms all filled out, don’t delete these records. You may need them in case of an audit or a mistake spotted in the form that needs to be corrected.
2. Consider Audit Red Flags
It’s never too late to consider and minimize audit red flags.
In 2020, the IRS wrapped up around half a million audits. That’s a huge drop from previous years, but it’s still possible it might happen to you.
You can minimize audit red flags by having all records prepared, calculating your expenses with care and accuracy, explaining huge deductions you’re taking, and e-filing. Although some people have to paper file, most people can e-file and the error rate is much lower.
3. Check Your Stimulus Payments
If you were eligible for them, make sure you received your stimulus payments this year. If you didn’t, you take them as a credit on your tax form.
It’s known as the Recovery Rebate Credit. Make sure you don’t miss out, as the IRS won’t deduct this automatically if you didn’t receive your payment.
4. Check for Last-Minute Deductions
The last thing you should do is go through and check for last-minute deductions. Financial services will be able to do this for you and advise you of what you can take.
We all want our tax bill to be the lowest it can be, so it’s fine to go through and check for things that might let you end up with a lower tax bill. Tax laws change from year to year, so make sure you’re up to date on the latest rules and aware of what you can possibly claim.
Year-End Tax Tips Are Good, Tax Planning Is Essential
These year-end tax tips can help you enormously when it comes to tax season, but all business owners should consider consistent tax planning and advisement.
Hiring great financial services helps, as they can do most of the work for you and find you savings. Orcutt & Company can provide you with various financial plans to help you with whatever you need — whether it’s bookkeeping, taxes, or payroll help.
We can even provide you with a tax strategy plan for upcoming years. Contact us today if you need help with your finances.