Everything You Need to Know About Filing Your Taxes

Tax season is typically not people’s favorite topic, but it must be discussed nonetheless. People and corporations alike have a responsibility to file their taxes when the season to do so rolls around.

While you may choose to hire a financial advisor to help you during this time, you still must know what the proper protocol to follow is. For starters, you can never forget the deadline, or else you can suffer the penalty for tax evasion.

Organizational skills are key during tax season, and you must thus gather all of the necessary documents and ensure there are no errors on any of your reports. Keep in mind that the amount of taxes you have to pay will also largely depend on the state you are located in.

All of these points will be explained in greater detail in this article.

Be mindful of the deadline

At the moment, the tax deadline for this year is April 15. It is incredibly important that you are mindful of this deadline and don’t lose sight of it at any point.

You shouldn’t have to wait until the last minute to gather all of the information that you need in order to file your taxes. Whether you are submitting personal or company taxes, you must already have an idea even about how much you need to send through, well in advance of the deadline. The following factors better illustrate how you can achieve this.

Gather all of the necessary documents

In order to file your taxes, you will need all of the necessary documents that you can account for. In particular, you should take a look at what you have purchased in the previous year, how many loans you have taken out, if you have accumulated interest, what your line of credit is like and any other financial expense.

You can’t possibly account for any deductible’s if you don’t list everything that you have spent your money on.

Dependent on your state

Keep in mind that depending on the state that you are located in, there will is a different level of state income tax that you have to pay. Some of the states that include the highest rates are California, Oregon, Minnesota among others. On the flipside, North Dakota, Indiana, and Pennsylvania have some of the lowest rates.

Knowing this ahead of time will keep you prepared so that you aren’t shocked with any of the final numbers.

Ensure there are no errors

It’s not enough to simply submit your taxes on time and ensure that you have accounted for everything. It is paramount that there are no errors on any of the files that you send. This is particularly true when it comes to an error on your credit report.

Imagine you check your line of credit report one day and realize that some of the information that is listed does not properly match with your payment history, and there are other inaccuracies throughout the account information. If you spot any of this, you need to resolve the issue sooner rather than later, and you can do so by filing for a Equifax dispute.

At the end of the day, you are the one that will potentially suffer if you do not double check you have sent through all of the correct information, especially when it comes to how much you can receive with tax returns.

No one is above taxes

There isn’t a single person or organization that is above tax submission. You may be wondering,  however, how is it that the government makes use of tax dollars that are sent through? There are a number of areas cities will benefit from, such as:

  • Improved healthcare
  • Road maintenance
  • Pension plans
  • Education

Penalty for tax evasion

Keep in mind that if you evade your tax submission, there is a high chance that you will face the penalties of doing so. Receiving a fine can be the consequence, but it can even include jail time, if you continue to neglect sending it through, despite how late it is at this point.

The sooner you start filling your taxes, the easier your life will be when April rolls around. There is no need to stress yourself, or your employees if you are a company owner, to gather everything last-minute. Rather, make sure to keep all of your finances organized and on file, and double check everything before you send it through.

Getting assistance from a financial expert is always worthwhile to ensure that you get the most out of your tax returns, as well. However, that does not mean that you shouldn’t be involved in the process, at least to some degree. It is your taxes that are being sent through, after all.