4 Things to Keep in Mind When You File Your Taxes

Nothing is as sure as death and taxes, the old saying goes. It’s true that many or most of us are obligated to file income tax every year about this time, although COVID-19 resulted in a filing extension last year. The IRS takes our tax filings seriously, so be sure yours is in order before e-filing or submitting the forms by mail.

Confirm Your Income

Although listing your main sources of income is fairly simple, don’t overlook additional earnings that need to be reported on your tax returns. There are specific tax laws that indicate the threshold under which your income need not be included. But over a certain limit, all additional revenue should be added. This might include a temporary job or a part-time position. Seasonal employment, like working as a summertime lifeguard or at a roadside produce market in the fall, should also be considered.

Clarify Your Dependents

As well as listing residential dependents who live in your home, remember to include other family members who are receiving financial support from you. This might include an aging loved one in a nursing facility or a college student son or daughter whose tuition and fees you are paying. Check with experienced tax attorneys for questions about who can qualify as a dependent on your tax return.

Check Your Deductions

Setting up a home office may qualify for tax deductions on things like your mortgage interest, a percentage of the utilities, and home maintenance or repair costs. You may be able to deduct expenses like these a Schedule C form for operating a business from your home. Business supplies and equipment might also be deductible as well as using your vehicle for business purposes. You may be eligible for other deductions as well, so ask your tax attorney about expenses you can claim.

Prepare Required Documentation

When organizing your tax return, use spreadsheets to list relevant figures and maintain running balances that can be updated as needed. Keep a mileage record for any driving you do related to a personal business. Collect receipts for purchases that might be deductible, such as business equipment and services as well as home maintenance. Don’t wait for tax season to arrange this information. Start new files on January 1st every year to keep all your information updated and accurate.

With methodical organization and spreadsheet tools along with advice from your tax attorney, filing your tax returns should become more convenient and less stressful. Start now, so you will be ready when tax season arrives again.