Preparing taxes isn’t easy. Avoid common tax preparation problems by following these tips.
At AOG Wealth Management, Northern Virginia wealth advisors, we have many years of experience helping our clients prepare and file their taxes. To get you started, we’ve created a helpful checklist you can use to prepare your taxes.
You need all your income information to file your tax return properly. Make sure you have the following information or documents:
• Form 1099 and W-2: Many employers send W-2s through regular mail in January. You’ll also receive Form 1099 from investment firms during this period. When you receive these documents, check to make sure the withholding amount is correct. If there are problems, get in touch with your human resources department or bank immediately.
• Business income: If you’re managing your own business, it’s time to start organizing your accounting records.
• State and local tax refunds from last year
• Social security benefits
• Unemployment income
• Other sources of income such as gambling and lottery winnings, medical savings accounts, jury duty stipends, etc.
You can increase your chances of getting a tax refund by knowing the adjustments that can reduce the amount you owe in taxes. For example:
• IRA contributions
• Green energy credits
• Student loan interest
• Mortgage interest
• Homebuyer tax credit
• Self-employed health insurance
• Moving expenses
• MSA (Medical Savings Account) contributions
Credits, Deductions, or Exemptions
Apart from income adjustments, these expenses can help you lower your taxes:
• Charitable contributions
• Adoption and/or child care costs
• Casualty and theft losses
• Education costs
• Medical expenses
• Qualified business expenses
Year-End Tax Adjustments
Another way to decrease your taxes is to evaluate steps to take before the end of the tax year. Some of these include:
• Increase your 401(K) contributions.
• Defer the receipt of money if possible, especially if the additional income will push you into a higher tax bracket.
• Pay your January mortgage in December. By doing so you can deduct it from your current year’s tax return. You can also do this for your property tax.
• Donate to qualified charities and organizations.
Preparing your taxes doesn’t have to be stressful. When you start early, you have more time to prepare and to seek advice from professionals.
If you need assistance with your taxes, AOG Wealth Management can help you. We are a Great Falls wealth management firm that offers a range of financial services. Contact us to schedule a complimentary consultation and to learn more about our services.
AOG Wealth Management, Inc. does not provide tax or legal advice. The opinions and views expressed here are for informational purposes only. Please consult with your tax and/or legal advisor for such guidance.