As an accounting major in college, I quickly learned all of the complicated parts of the accounting cycle. I discovered how to input the details of business transactions into a computerized accounting system. At the end of an accounting cycle, such as a month, I became experienced with calculating the revenue for the period. If you’re starting a new business, determining an accurate amount of revenue for each accounting cycle is crucial. You must know how much profit you’re making each accounting period in order to be successful in the long-term. On this blog, you will discover how an experienced accountant can help you keep track of your revenue.
When tax season approaches, it is time to start gathering your pay stubs, tax documents, and records to file your federal and state taxes. If you are not accustomed to filing them on your own, the following tips can help.
Do: Gather and organize all your records
You should always start by getting all of your records together. Make sure your place of employment sent a W-2, as this is needed to see your income and deductions for the year. If you are self-employed, you should have statements and records that show your profits and loss for the year. You also want to have a variety of other records, including:
Do: Hire an accountant for complex tax situations
While it is great that you want to file your own taxes, there are some complex situations that might require the help of an accountant (like those at The Callen Accounting Group, PLLC). If you had any major life changes, such as buying a home or adopting a child, you might want to ask an accountant for help. They can help you get the right deductions. Speaking of deductions, if you have a lot of them, you should have an accountant file for you so you don't end up paying more than you should have. You should also get an accountant if you run a business, even a home-based one.
Don't: Use the wrong form
If you are filing your taxes online, the system will generate the right form for you. However, many people still file by paper, so you need to make sure you have the right form. Here is a rundown of the most popular forms to be using:
1040EZ – The 1040EZ form is the most basic of federal tax forms. If you have a lower taxable and interest income, your income is only from wages or unemployment, and you are not a senior, then you can use this form. It is also commonly used by people without income adjustments, who are using the standard deduction, and who are filing single or married filing jointly.
1040A – There is also the 1040A, which is called the short form. This is also used if you are going to use standard deductions. If you are itemizing your deductions, you can't use the 1040A form. You can use the 1040A for any filing status and if your income is from wages, dividends, social security, unemployment, pension, interest, or scholarships.
1040 – If you don't qualify for the 1040EZ or 1040A, you will use the 1040. This is called the long form and is used if you are itemizing deductions or are above the tax bracket for the previous forms. This is also used if you have stocks or bonds, foreign wages, or if you have income from a partnership, S-corporation, or farm.
Don't: Forget to include additional sources of income
You need to include all sources of income, regardless of where it came from. A common mistake made is not including income that doesn't pertain to your regular employment. For example, if you started a side business from home making handmade jewelry and selling it online, anything you earned needs to be filed on your taxes. The same goes for unemployment benefits and large cash gifts. There are a few exceptions with cash gifts; if the cash gift was to or from a spouse, given to someone for medical expenses, or given to a charity, it doesn't have to be claimed.Share