Tax office guides plus companies? The Internal Revenue Service (IRS) reports that more than 80 million taxpayers use paid professionals to complete and submit their tax returns.1? If you’re one of these individuals, it is important to organize your receipts, forms and other documents well before tax time. Your preparer may take information directly from you or ask you to complete a questionnaire. Either way, you’ll need time to gather everything you—and your preparer—will need. Here are the steps to take.
Let’s start with retirement accounts. Employer-based accounts such as 401(k) and 403(b) accounts allow you to lower your taxable income easily. That’s because every dollar you put into these accounts is not taxed until you withdraw the money from your account — and that reduces your tax burden each year you make a contribution. The benefit here is that if you wait until you have retired to withdraw money from your 401(k), your income will be lower because you’ll no longer be drawing a salary. The result? You’ll be in a lower tax bracket, which means that the money you withdraw will be taxed at a much lower rate than it would’ve been if you’d had to pay taxes when you earned it.
The Internal Revenue Code is set up to provide numerous tax breaks to individuals and businesses alike. Even the IRS acknowledges that you must keep some money to live on and with which to run your enterprise. Some small business tax savings strategies, like timing income and expenses, must be accomplished before the end of the tax year. But others, such as funding a retirement plan, can be done at any time before you file your tax return. Read additional info on https://greentree.tax/best-bookkeeping-service-in-houston-texas/.
It’s much easier to sort through everything now than when 2019 is a distant memory. In fact, reviewing and organizing your records monthly helps spread the workload throughout the year instead of cramming it all into a year-end rush. Take time to go through any forms you’ve already filed (like Form 941) to check for accuracy. Make sure to confirm EIN numbers, social security numbers, and anything else the IRS might use to identify you or your employees. And when you’re done, move all your forms, invoices, and receipts into the same place — whether it’s online or a in physical folder — so you’ll be ready for tax time.
