Year after year you experience the same dreaded feeling about preparing and completing your tax returns seems overwhelming. Filing your tax returns may give you plenty of headaches especially if your documentation is in disarray. You worry about the risk of whether or not numbers are right, will you be able to file timely or file an extension and what penalties and interest will you incur that further impact your finances. Here are five tips to maximize tax deductions and minimize your accountant bills.
Your documentation should be maintained effectively. Immediately after paying bills make sure documentation such as the receipt and invoices are correctly filed. This will make accounting for your business and prepare your taxes much easier. Being organized also ensures you are taking advantage of all eligible tax deductions. Who wants to miss out on hundreds of dollars in eligible expenses because the documentation is missing? Organizing your receipts and invoices allows you to get out of your shoebox and into your filing cabinet. Organization means less time spent and less money used.
Make regular donations
It may sound unethical, but those regular donations you make for charity is a win, win. You will be able to maximize your tax deductions and the charity receives more products, services, and/or income to help their cause. Keep in mind, the charity must comply with laws that classify the organization you are donating to as having a Deductible Gift Recipient status.
Working from home
If you work from home here is an opportunity for to significantly maximize your tax deductions. Working from home in most cases includes purchasing assets such as computers, printers, and other telecommunication equipment. Along with proper documentation, you can claim tax deductions.
The income that is for the month of December is a sure way of having more money at the end of the calendar year. December 31stis the end of the tax filing year, therefore if the income is delayed beyond that time, then you will have more money for the next financial year.
Be thorough with your bank statement
With the use of credit cards and other smart cards has made it easy to monitor our expenses providing detailed information about our bank expenditures. Receipts provide the best way to identify possible tax deductible purchases. Find those receipts and go through them. Start maximizing your tax deductions today and you will be ready for the 2016 tax season.
These are just a few simple ways you can maximize your tax deductions.