Tax season can be quite complex. But with proper planning, it should not be too difficult to hurdle. With the right preparation, you can pay your taxes stress-free. These 7 tips will help you complete your filing without difficulty.
The best way you can reduce stress is to prepare adequately. Remember: failing to plan is planning to fail. It is important to read up on tax requirements and filing procedure for the year. Doing so ensures that you won’t have to frantically dig up files a few minutes before heading to the BIR. It is also beneficial if you learn more about tax laws and closely monitor the passing of new tax laws or repealing old ones.
There is nothing worse than looking for old receipts a few months before filing your taxes. Cramming your income and expense documentation might not sound that bad, but you are no longer in high school. Rushing something that requires close attention to details is asking for trouble.
Tax season does not start in March. It starts at the beginning of the fiscal year. If you are looking to have a stress-free tax season, you must start by keeping good records of all your income and expenses. Updating these two accounts monthly will not only help you check your spending habits but will also allow you to keep a more accurate record. When things are accounted for, you can also make sound decisions.
In the long odds of getting investigated or audited, you will be required to present several documents including, but not limited to statements of financial position, statement of comprehensive income, bank statements, sales invoice, and receipts. Keeping a good record of all business-related documents, like receipts for company meetings and functions, can help lessen your taxes.
Of course, there is a proper way to keep these documents without chucking them into a drawer. It is best to have separate files for receipts, invoices, statements, and other documents, to give you an easier time to find them when the need arises. It may also help to file them in chronological order as well as by transaction partners. It is also advised to keep double-records of items -physical copy and e copy- for cross-referencing.
Taxation is a mountain that must be climbed head on. Like trekking, it is much easier to hurdle if it is taken one step at a time and breaks in between. When preparing to file your taxes, make sure you follow a schedule, so you don’t go crazy looking for invoices and crunching numbers. Set aside 30 minutes of your day, every day, to devote to your financial upkeep and tax preparations. When it becomes a habit, it ceases being a chore.
Government agencies do not allow fixers to process documents. It is also not advisable to have someone other than a professional or yourself deal with tax filing as the process involves producing, securing, and transacting sensitive documents and information.
Make use of online calculators, automatic income and expense forms, money trackers, spreadsheets, etc. Leveraging tech allows you to monitor your habits and be on top of your finances. It also ensures easy viewing as you can consolidate accounts into one spreadsheet or app.
When in doubt, look for a professional to help you out! Not everyone is great at being organized and nit-picky, and that’s okay. If you are having trouble keeping up with your taxes, seek out a licensed CPA to help you monitor your finances and keep track of your records. You will have to pay the professional fees, but it comes with the benefit of having a worry-free tax experience as the only thing you need to do are forward your invoices and transactions.