The very thought of preparing your tax filings can be quite stressful, not just because you’re worried about the amount of taxes that you have to pay or whether you are doing your tax preparation and filing properly. In any case, you should enter the tax season well prepared as this will make your life much easier, and you’ll be able to receive your tax returns sooner rather than later.
By contacting the best tax specialists in San Diego, you ensure a smooth and hassle-free tax filing experience. In the following article, we’ll take a look at five tips to make your preparation and filing a less daunting endeavor.
What is the easiest way to do your taxes?
1. Don’t procrastinate
People are often tempted, when faced with daunting tasks such as tax preparation, to postpone starting working on them and thus to leave tax preparation till the deadline almost expires. This is always dangerous because you may end up rushing into tax preparation and filing, you may omit important elements, make unwanted errors and miss out on some eventual tax deductions or savings.
In case of any tax debt to the IRS, the most dangerous thing is being late when filing a tax return, because you expose yourself to late filing penalties (that can amount to up to 25% of the taxes owed!). It is always advisable to file IRS Form 4868 if you know that you will not be ready to file by the April 15th deadline, which will give you an extension of six months for filing tax returns. However, this does not postpone your tax obligations and all tax debts you have on April 15 have to be paid by that date, otherwise you are faced with late-pay penalties.
2. Get your bookkeeping in order
In order to simplify collecting your company’s financial statements and other information for tax purposes, it is very important to maintain a structured and up-to-date bookkeeping system. For these purposes, it is vital to regularly enter and categorize all the necessary entries in your bookkeeping software in spreadsheets.
Check whether you have collected all your bank statements, receipts, and other relevant supporting financial information. Compare them to your book entries to be confident that they fully match. Also, make sure that you have separated all your personal expenses from your business accounts and that only business expenses and accounts are shown in the business books and bank statements.
If you have any doubt regarding the accuracy of your business books, it is always better to hire an experienced accountant or CPA who will review all the relevant financial documents. They’ll be able to deal with and recognize any discrepancies.
3. Know what form you need to file
A key element is the tax forms that you need to file. You must fully understand which ones you are supposed to file as the business owner, depending on the type of business and incorporation of your business entity.
Following are some examples of forms that different types of business owners are supposed to file:
- Sole proprietors file Schedule C
- Partnerships file Form 1065
- C corporations file Form 1120
- S corporations file Form 1120S
4. Consult with an expert
In case of complex tax situations, you are self-employed, have substantial investments, or your schedule does not leave you enough time to finalize your tax preparation on your own, it may be advisable to hire a seasoned tax preparer. Although at first glance, this might seem expensive, at the end of the day, such an advisor can end up saving money for you.
Who are the best tax specialists in San Diego & the region?
If you are having trouble filing your taxes, your safest bet is to get in touch with seasoned experts in the field of taxation. Leave nothing to chance and contact our team for assistance. We’ll provide you with a smooth and hassle-free experience for your peace of mind. David York Tax Service is at your disposal in La Jolla and all across San Diego County. Reach out today and set up an appointment!