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2020 Tax Season: How Prepared Are You?

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Tax season can be either exciting or worrisome, depending on where you’re coming from. If you’re anticipating a substantial tax return, then good for you. But what if you’re unsure about what tax season will bring? Or worse, you think you don’t have an idea how much you owe the government in taxes.

Being in that state of uncertainty can be stressful, which can leave you anxious and edgy. The best way to avoid this is to make sure you prepare for tax season well in advance.

If you need the help of professional tax experts, do not hesitate to reach out to credible and trusted professionals, like the Tri-Merit group. The sooner you get to working on your taxes, the better off you’ll be.

5 Ways to Prepare for Tax Season

1. Save and secure each tax form that comes your way.

It is important to secure all the statements, W-2s, and 1099s that come your way. Have a place where you can safely keep each of them. Ideally, you can have them all stored in one place or drawer so you do not need to go looking for them in different places.

A single manila folder would probably be a good solution for this. Place all the forms inside it, label the folder, and safely tuck them in with all your other important documents.

2. Figure out how you want to go about the whole process.

woman doing taxesHow do you plan to go about the tax filing and payment process? Do you want to do it all by yourself? Will you use a software for it or would you rather do it manually? Do you need the help of a preparer or a tax professional?

These are things you have to answer if you want to make the process easier. Once you’ve figured out how you want to do it, you may now take the appropriate follow-up steps.

3. Make contributions to your Traditional IRA.

Consider making contributions to your Traditional IRA. It is important to know that while you are setting aside money in your IRA, the amount you put in is tax-deductible, the earnings are tax-free, but the withdrawals are all subject to income tax.

If you still haven’t opened one, it’s not yet late. Just make sure your contributions are made prior to filing.

4. Consider if changes need to be made in your filing status.

Did you get married in the past year? Divorced? Have you had any children within the last 12 months?

Changes in your filing status will affect the amount of taxes you will pay. There have been significant adjustments made to this year’s income tax bracket and filing status rates.

5. Anticipate the need to file for an extension.

Based on the documents you have on hand, you can somehow see if your tax situation is slightly more complex than usual. If you are caught in this predicament, anticipate the need to request for an extension. Doing this will help prevent penalties and charges made on late filing.

Filing and paying taxes is the duty of each American. We should always give Uncle Sam what is due to him. File and pay your taxes on time to avoid any unnecessary penalties and interests. Lessen your stress and get moving as early as now.

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