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How to prepare for tax season with planning services
March 12, 2021 at 7:00 AM
How to prepare for tax season with planning services

Tax season is stressful for everyone. Whether you’re preparing your taxes or having someone do them for you, that April 15 deadline can sneak up on you if you’re not prepared for it. At Transformational Finances, we can help you get ready with tax planning services.

Gather your tax documents and financial records

In order to know what to expect with your taxes, it’s important to have all the information in one place so you can get the whole picture. Gather all your form W-2, 1099, and whatever else you need based on your employment status and income. Have everything that you need ready so that you or a tax professional has everything close by. This will save you a bunch of time and headaches.

Learn about this year’s changes

Tax laws, rebates, and credits change nearly every year. It’s important to know where you stand with the tax code each year. If you had a major life event last year like getting married, having a baby, getting a new job, or moving, find out what exactly that means for you and your taxes. A tax professional can help you maximize your return by finding areas where you can benefit the most.

Verify your paychecks

Before having someone look over your tax documents, you should make sure that they match what your paychecks have been reporting. You can check what your W-2 says you were paid against your final paycheck of last year by looking at the YTP (year to date) section that shows how much you were paid in gross as well as total withholdings. Speak with your employer if you find any discrepancies between the documents.

Gather information on deductions

If you’re planning on filing any tax deductions, make sure that you have all the necessary documentation to back it up. This includes charitable donations and business expenses that you’re planning on filing as deductions. Make a plan ahead of time to know if you’re going to itemize your deductions or not. Keep in mind that not all the deductions that you claim are required to be itemized. Non-itemized deductions include but are not limited to:

  • Educator expenses
  • Student loan interest
  • HSA contributions
  • IRA contributions
  • Early withdrawal penalties
  • Alimony payments

However, you can itemize items that include:

  • Property taxes
  • Medical and dental expenses that exceed 7.5% of your adjusted gross income
  • The mortgage interest paid on up to two homes
  • Charitable donations

If you’re unsure which category fits your deductions, ask your preparer to help you organize them.

Choose a preparer

Tax preparers are experts. Getting help from a tax professional to file your taxes not only saves you time but helps you get a bigger return. According to Vault Wealth Management, filers who used a tax professional received an average of $840 more than those who self-filed. Furthermore, a preparer will double-check their work to make sure that you won’t run into any problems with what you’ve filed in the future.

Schedule an appointment with Transformational Finances

Get your finances in order this tax season with Transformational Finances. We’re here to help you with our tax planning services so that you’re not caught off guard with any taxes that you might have to pay. Give us a call at 310-407-2824 or send us a message using our online contact form. We can schedule an appointment to go over your tax information for this year.