You need to get ready for the coming tax season. Here are essential things you need to know that will help you have an easy time come tax time.
The tax season is just a few months away, and you need to get ready for the season. Getting ready for the season ensures you prepare and file your tax returns on time. In addition, it gives you enough time to work on all the deductions and credits you qualify for; making sure you either reduce your tax bill or increase your tax refund. To help you get ready for the coming tax season, here are 4 essential things you need to know.
The tax season is likely to open on January 27th and close on 15 April
Knowing when the tax season opens and closes is of great help. This will ensure that you prepare your taxes early and file them immediately the IRS declares the season open. You need to know that when you file your taxes late, you will have to pay late filing penalties. Besides that, filing your taxes as soon as the season starts ensures that you get your tax refund in less than 21 days.
You can use online tax filing software to prepare and file your taxes
Thanks to technological advancements, the IRS accepts online tax filing. You can prepare and file your tax returns easily using online tax filing software. You can just pick one of the best tax filing software like TurboTax, and you will prepare and submit the tax returns when the IRS opens the tax filing period. Tax filing can be a frustrating process, and using an online tax filing program will simplify the whole process. Don’t hire a tax professional to prepare and file taxes for you this coming season; use the best online tax filing software.
For deductions and credits, gather all tax documents
If you want tax deductions and credits you qualify for to count, you need to have tax documents. You need to have receipts and documents showing medical expenses, mortgage interests, energy-efficient home improvement expenses and more. This will ensure you have an easy time when claiming the tax credits and deductions you are entitled to. If you don’t have the documents, you will not be able to claim the credits and even make the deductions count.
Check out latest tax brackets, and familiarize yourself with different filing situations
Depending on your tax filing status or situation, you need to check out the IRS tax brackets to get an estimate of the amount of tax you will be required to pay. If you are self-employed find out if there are new changes regarding the tax filing process. Also, if you sold a home, you need to know the tax you will be required to pay on capital gains on home sale. For this year, if you sold a home and made a profit of less than $250,000, or $500,000 for joint filers, you won’t owe anything according to capital gains tax 2020. In short, familiarize yourself with some of these situations to have an easy time come tax season.
Knowing the above things will help you have an easy time come tax season. Remember filing taxes is not just about submitting your income, and withheld taxes, you need also to work on deductions and credits you qualify for. This ensures you lower your tax bill. Also, prepare and file your taxes online, and you will have an easy time.