According to the Internal Revenue Service (IRS), over 85 million taxpayers pay a professional to handle and submit their tax returns. And if you’re one of them, you must have all your information ready, including your receipts, forms, and other documents, before tax time.
Your tax preparer may take your information directly from you or ask you to complete a questionnaire. Either way, a little preparation goes a long way before tax season, so the process goes quickly and easily. This article will cover everything you need to know about tax preparation in Broomfield.
Steps to take to be prepared for tax season
Here are several steps you should take to be ready for tax season in Broomfield.
1. Choose a tax preparer
If you don’t have a tax preparer, consider asking your friends and family members for referrals. You’ll want to ensure the professional you choose has a preparer tax identification number (PTIN), showing they are authorized to handle and prepare federal income tax returns.
Remember to inquire how much they charge in fees. This will, of course, depend on how complex your tax return is.
2. Gather your documents
You should receive all the tax documents you need from your employer as well as from banks, brokerage firms, or others by the end of January. Here are some common forms to look out for:
Form W-2 if you have a job
Various 1099 forms that report other income, such as dividends (Form 1099-DIV), interest (Form 1099-INT), and nonemployee compensation paid to independent contractors (Form 1099-MISC)
Form 1098 for reporting mortgage interest
Form W-2G for gambling winnings
3. Round up your receipts
The receipts you need to provide will depend on whether you itemize your deductions or claim the standard deduction. Either way, you’ll want to be prepared and choose whichever produces the more significant write-off. The only way to know for sure is to add up your itemized deductions and compare the result with your standard deduction.
For the 2022 tax year, the standard deduction for single taxpayers is $12,950, and for married couples filing jointly, it is $25,900.
Be sure to look for receipts for medical costs not covered by insurance or reimbursed by any other health plan, property taxes, and investment-related expenses. These are all subject to limits, but if they are substantial enough, it may be worthwhile to itemize.
4. List your personal information
While you may know your Social Security number (SSN), do you know the SSN of each dependent you claim? You’ll want to have that information written down in a safe place, along with any other information your tax preparer will need. For example, if you own a vacation home or rental property, note the addresses.
KRD Tax & Consulting is a tax consultancy and preparation service working with businesses to eliminate the stress of tax season.
Our tax consultancy service takes a holistic approach to our clients’ comprehensive financial solution strategies. We help businesses achieve breakthrough profitability by combining tax strategies, financial analysis, and consulting services.
Instead of dealing with the stress of tax season year after year, you can optimize your processes and procedures. We’ll help you eliminate the anxiety of taxes and use them to help your bottom line. KRD Tax & Consulting brings expertise and insight to a business’s finances and taxes so owners can focus on their passion instead.
If you’re ready for a new, expert approach to your business, the KRD team provides skilled Broomfield-based tax consultancy services.