Owning a small business comes with many challenges you don’t necessarily have experience in, having a good relationship with whichever professional you chose to prepare your tax returns can take the weight of numbers and IRS jargon off your plate. Here are our top three tips to a smooth and successful tax season.
Once you Find a Tax Preparer, Stick With Them!
Once you’ve found the right person, stick with him, says Raymond Wilson, a metro Atlanta-based certified public accountant. “When you change preparers frequently they don’t know your tax history,” Wilson says. “Even though you may have a copy of the previous return, there’s only so much a preparer can deduce from a few sheets of paper.” That’s why it’s important to find the right person. The IRS Directory of Federal Tax Return Preparers at irs.treasury.gov/rpo/rpo.jsf is a good place to find tax pros with credentials. Check with the Better Business Bureau for complaints, and avoid preparers who base their fees on percentage of your refund.
Gather up your paperwork!
Organizing your tax documents before your appointment can make the process go more smoothly and quickly — which can save you money if you’re paying by the hour. At the very least, you’ll need to provide:
1. Identification
2. A copy of your most recent return
3. All income- and expense-related documents
Don’t leave any tax forms at home! Many tax prepares have stories of numerous of returns they’ve amended because people forget about one-time distributions they took (to buy a car or take a vacation, etc..)
If you get a tax form in the mail, always report it
Ask about withholding.
Everyone, retirees included, must pay tax liabilities throughout the year. If you don’t have enough taxes withheld, you could face a surprise year-end tax bill or even a penalty.
That’s why seniors need to consider their total income when deciding how much tax to withhold from their pensions and Social Security. Say you have 10% withheld from your pension, but you fail to account for other sources of income, such as dividends, interest, and required minimum distributions, that could push you into a higher tax bracket.
Considering your total income you may want to withhold an average of 15% on everything to cover their total liability for the year.
Your tax preparer can help you decide on the percentage of income you need to withhold each year.
For assistance with your 2022 tax preparation contact CBBS today at 603-541-7485 or schedule a free consultation, and we’ll be happy to help you navigate tax season successfully!