Tax season is here! Who’s ready for a big refund check? This girl!
However, let me be honest… As a new business owner and full-time freelancer, I’m a bit nervous about filing this year.
I had a lot of changes happen from moving and buying start-up equipment to traveling to clients and switching healthcare providers. There’s so much, I sort of don’t know where to start.
Luckily, we have the internet and well-known services like TurboTax, H&R Block, and Liberty Tax to help us along the way.
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But how many of those entities can really relate to your situation? Can you really disclose everything truthfully to them and trust that they will find a way to get the most out of your refund, while also ensuring that the IRS won’t come knocking on your door?
This year I knew I had to work with someone I knew would have my back.
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Black-owned and a top leader in urban financial development, JET Accounting and Tax Solutions is an online-based finance consulting company dedicated to serving people of color. Their services include personal and business tax filing, bookkeeping, savings, investments, and financial consultations.
I spoke to the CFO, Taariq Muhammad, to see how I can make this year a stress-free tax season.
BlackDoctor.Org (BDO): What are the top things I need to consider to make this year stress-free when filing my taxes?
Taariq Muhammad (TM): Odds are if you’re online searching for tax tips at this time of the year, you’re already stressed out! But fear not, I have some key tips for a stress-free tax season, however, the #1 thing to always remember is to prepare all year long. That way, when it’s time to file, it’ll be no sweat off your back. You got this!
So, if you're strapped for time and a little bit clueless when it comes to taxes, check out these quick tips to get you through the tax season:
1. Use A Tax Preparer for Tax Season!
An experienced tax professional can ensure accuracy and that you do not miss out on any deductions and credits you may qualify for.
At JET Accounting and Tax Solutions, we offer first-time clients a free consultation. Ask the questions you’ve been dreading confronting all year so that you can gain a clear understanding of your situation then you won’t have to worry about them later!
2. Keep Up with Your Mileage.
Tracking a log of any miles. Documenting the miles that are driven by volunteering, work, business, or medical appointments is very helpful when filing. Be sure to save all travel-related receipts as well, this includes parking, tolls, bus or taxi, gas, and repairs.
3. Redo Your W-4.
Fill out your W-4 at the start of each year to make sure your withholding matches that year’s expected financial situation. Make sure to resubmit it anytime there is a change in your life. I don’t think that I can stress this enough to my clients, but remember that the focus should be less on receiving a refund and more on reducing tax liability.
It’s much better to put that extra money into some type of interest-bearing account throughout the year. Think about it. If you wait until the end of the year to collect a refund, you’ve done nothing but give our government an interest-free loan!
4. File Early.
If you want your tax return even faster, make sure to choose the option to eFile and use direct deposit for the fastest processing times.
5. Increase Payments Prior To The End of The Year.
If you can, postpone the collection of income until after December 31st and accelerate the payment of certain bills prior to December 31st. This can help increase your itemizing potential, which can result in a bigger refund.
For example, pay January's mortgage payment in December, this will later increase your mortgage interest deduction. Some other examples include scheduling health-related treatments and exams in the last quarter of the year, which will increase your medical expense deduction later.
Pay property taxes, and if you're self-employed, pay your fourth-quarter state estimated taxes early in December too. Rather than waiting until January when these types of expenses are normally due, paying early will ultimately lead to a higher refund in the end.
6. Track All Big-Ticket Purchases.
Keeping track of all state and local taxes you pay on all major items will grant you a bigger refund when it’s time to itemize your deductions.
7. Use Your Debit Card For Everything & Track Paperless Records As They Come In.
Do a monthly recollection of all your tax-related electronic transactions. It will make you and your tax preparer’s job much easier. Each month log in to your bank account and separate any tax-related transactions such as charitable donations, fees for health care, job-search costs, and unreimbursed work expenses.
8. Save Receipts for Tax Season!
Last but certainly not least, be sure to always save receipts whenever possible. It is a simple thing, yet when it comes down to it, people hardly ever do it anymore. Start with saving at least the big expense receipts. If you get audited, all those things you claimed will ultimately need to have proof.
Truthfully, with these tips, you can make this tax season work for you. You can also start working with your tax advisor now. It's a great way to get a headstart on ways to get the most out of your refund. Remember April 18 is the deadline to file taxes this year. Good luck!
