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Tax Preparation

Benefits of Filing a Tax Return

 

Get money back. In some cases, you may get money back when you file your tax return. For example, if your employer withheld taxes from your paycheck, you may be owed a refund when you file your taxes.

 

Avoid interest and penalties. You may avoid interest and penalties by filing an accurate tax return on time and paying any tax you owe in the right way before the deadline. Even if you can't pay, you should file on time or request an extension to avoid owing more money.

 

Protect your credit. You may avoid having a lien placed against you when you file an accurate tax return on time and pay any tax you owe in the right way before the deadline. Liens can damage your credit score and make it harder for you to get a loan.

 

Apply for financial aid. An accurate tax return can make it easier to apply for help with education expenses.

 

Build your Social Security benefit. Claiming your self-employment income on your return ensures that it will be included in your benefit calculation.

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Get an accurate picture of your income. When you apply for a loan, lenders will look at your tax return to figure your interest rate and decide if you can repay. If you file accurate tax returns, you may get a loan with a lower interest rate and better repayment terms.

Tax Prep Checklist

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Gather these items prior to filing your tax return

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Social Security numbers for you, your spouse and dependents or an Individual Taxpayer Identification Number if you, your spouse or your dependents do not have a Social Security number.

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Birth dates for you, your spouse and dependents on the tax return.

 

Wage and earning statements (Form W-2, W-2G, 1099-R,1099-Misc) from all employers, issuing agencies or payers , including Form 1099-G,Certain Government Payments, for any taxable unemployment compensation.

 

Forms 1099 for interest and dividend statements from banks and other payers.

 

A copy of last year’s federal and state returns

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Bank account routing and account numbers for direct deposit.

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Total paid for daycare or dependent care expenses and the provider’s tax number, such as their Social Security number or business Employer Identification Number.

 

Form 1095-A, Health Insurance Marketplace Statement

Tax Planning

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 Reduction strategies for high income earners that can help you keep that money you’ve worked so hard for.

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Start or Invest in a Business

One of the best tax reduction strategies is to invest money into a business. If you don’t have a business already, you should start one so that you can invest money into a company.

To make sure you can reduce your taxes as much as possible, track your expenses throughout the year. 

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 Max Out Your Retirement Account

Another one of the best tax reduction strategies for high-income earners is to contribute to a retirement account. Specifically, contribute to a traditional 401(k) or IRA.

 

Choose an HSA-Eligible Health Plan

When shopping for health insurance, you have to consider a lot of factors. You need to make sure the plan covers your doctors and any prescriptions that you or your family members take.

 

Maximize Tax Credits

You can look at other tax credits that you may qualify for to reduce your taxable income. Depending on how high your income is, you may be able to get certain tax credits.

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Increase Charitable Donations

Another excellent option for how to pay less taxes is to donate to charity. Whether you donate a car or cash, you can give to a 501(c)3 organization or multiple organizations.

 

Do a 1031 Exchange

If you want to sell and buy property, you may want to do a 1031 exchange. This allows you to buy and sell real estate without having to pay capital gains tax on the money you earn from selling your old property.

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