Tax time is among us. After a year of income, expenses, the purchasing or selling off of assets, and charitable giving, it’s time to inform the IRS of all the hard work you’ve done to stay on top of it all. Many citizens view tax season as a time for stressing out and getting some last minute accounting done before that faithful April 15th deadline.
I, on the other hand, like to think of it as the final stretch before you have to start preparing for next year. Whether you’re a business owner or just live in the New York area, there are some important accounting tips that everyone should know in order to make your tax season less stressful. With everything on your plate, I can assume that the last thing you need is the IRS snooping around your finances in the form of an audit.
Without spending too much time on introductions, I’d like to present you with the top 10 accounting tips that every New York taxpayer should at least be aware of. Don’t allow yourself to fall into the usual pitfalls associated with tax season but instead stay one step ahead while saving some extra money.
10. Keep a Paper Trail
Remember all of those bank statements you would receive every month? Well, I hoped you saved them. Efiling taxes is all about keeping track of how much you made versus how much you spent. What better way to do so than by keeping a record of it all? Holding on to your bank and financial statements, as well as receipts for large purchases, makes your accountant’s job much easier when the time comes for filing.
9. Know Your Deductions
If you’re a home or business owner in the New York area, then chances are that you are eligible for a deduction or two. Tax deductions can range from charitable giving or expenses incurred while taking care of a loved one, to advertising costs for your business and transporting your belonging for a new job. Talk with your accountant in detail to ensure that you don’t miss an opportunity to save some money.
8. Keep Up with the Times
A little reading can go a long way. On the other hand, failing to stay informed can lead to you landing in hot water with the IRS. Did you know that it is now mandated by the city of New York that your tax return must be filed electronically? For those that did, good job. For those that didn’t, this is why it’s important to keep a look out for updates and news regarding your taxes.
7. Find the Right Accountant for You
Accounting firms in New York are a dime a dozen. That being said, not every firm or accountant is going to be able to satisfy your financial necessities. Whether you’re looking at Legacy Professionals, Miller Cooper & Co., or BDO, be sure to do your research before signing anything with anyone. The right partnership is not only about what they can provide you but also how well they understand your situation.
6. Do Not Fear the Audit
The auditing process can be scary. The IRS is practically placing a microscope over your finances while costing you hours of hard work and frustration. However, the worst thing you can do is be non-compliant. Despite the auditing process being annoying, it isn’t supernatural nor is it a jail sentence. Many individuals come out of it just fine and wiser about how to avoid mistakes that got them there in the first place.
5. Tell Your Accountant Everything
The first step in a profitable relationship between you and your accountant is trust. When filing your taxes, it’s important that your accountant knows every detail of your financial history. That includes any money owed or debt incurred, frivolous expenses, or additional sources of income. This will allow them to evaluate your financial situation and advise you on how to proceed.
4. Don’t Hesitate to Speak to the IRS
Believe it or not but the IRS is not the bogeyman. In fact, one of their main purposes is to assist you in the tax preparation process. If you find yourself stuck at any point, don’t hesitate to give them a call. The IRS has a customer support staff trained to answer any question you may have. Keep in mind that it’s only when you’re doing something wrong that they turn into the feared establishment you know them as.
3. Create a Timetable
The date April 15th should be burned into the back of your brain. This is the deadline that your tax return has to be filed by. Prepping your taxes can take some time so be sure to create a timetable. In the event that you not able to make the deadline, then immediately file for an extension. Success during tax season is all about well you manage your time. Don’t take any chances and plan accordingly.
2. Pay off Any Money Owed
If there’s no person you don’t want to owe money to, it’s the Internal Revenue Service. Tax evasion is a serious crime and too many citizens have gone to jail for refusing to cough up the cash. If you owe any money on your taxes, here some advice; pay it now. If you can’t afford to, then immediately get on the phone with the IRS to discuss a payment plan. Fees, penalties, and jail time are just not worth it.
1. Do Your Research
Just because accounting is a complicated field doesn’t mean that you can’t have your fair share of expertise. Read up on possible deductions, how to communicate and comply with the IRS, and which forms you need fill to out. The more you know, the less of a foreign language it will sound like when your accountant is informing you on what is needed. Knowledge is power, and in this case, it’s key to success during tax season as well.