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Happy New Year! Start Prepping your Taxes Today!

Happy New Year from Practical Accounting Solutions!

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We wish you the best in 2019 and hope you have a wonderful year! It's not too early to start planning for tax season! According to the IRS, 36% of taxpayers wait until April to file their returns. We know how stressful filing your taxes can be, so we prepared some tips to help you file early and get your refund even quicker!

Have a System

Keeping organized is one of the best ways to make filing taxes easy. Put all of your important documents in one place, including receipts and documents to help you itemize reductions. If you did any home improvements, keep those receipts, too, especially if you plan to sell; the IRS can use these to help determine how much tax you owe when you decide to sell your home. In a previous post, we discussed how charitable donations can be a tax deduction. Keep those receipts for your itemized deduction list. By having all of these documents in one place, you can easily organize your information for when you decide to file. Practical Accounting Solutions is also here to help! Bring in your documentation and we will help take the stress off by preparing your tax return for you!

Familiarize Yourself with the New Tax Law

Like with any big decision, don't decide until you have all the information. The Tax Cuts and Jobs Act of 2017 included some big changes to your tax breaks. Familiarize yourself with the new tax breaks, including rules that changed and new rules that emerged, before making any big decisions and preparing your taxes. If you make charitable donations, be sure they follow the deduction requirements, or you may have no tax break at all! Create a financial strategy to help you make big decisions throughout the next year and have a spending plan in place, too.

Consider Your 401(K)

Generally, the IRS does not tax contributions to traditional 401(K)s. If you contribute more this year, you may be able to deflate your tax bill. This is also a great time to review your paperwork and see if your company matches your 401(K) contributions and review beneficiaries on your accounts. Familiarize yourself with contribution limits and evaluate how much more you can contribute in the upcoming year.


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