5 Tax Resolutions For the New Year

January 22, 2021

While doing your taxes probably isn’t your favorite thing, there are plenty of ways to make the process less complicated. If you’re still making resolutions for the new year, review those concerning your taxes. Your Los Angeles accounting service recommends these “resolutions” to streamline tax time. 

Organize All Tax Documents

Dedicate a file exclusively to tax documents if you haven’t already. Tax experts recommend keeping at least seven years’ worth of back taxes in case of future issues, such as the IRS randomly deciding to audit you. Organize back tax documents as well as current tax documents as you receive them to avoid trying to find what you need on Tax Day. 

Update Your W-2

Start the new year off right by updating your W-2 tax form as necessary. The IRS revised the form in 2019 to help taxpayers make correct and efficient withholding calculations. If your address, marital status, or anything else changed relating to tax documentation this past year, update your form now. 

Keep Up With Foreign Transactions

Track every single foreign transaction, if applicable. The IRS will inquire about any foreign activity that looks suspicious, such as excessive deposits into offshore accounts. Also pay close attention to any cryptocurrency activity on your accounts for the same reason. 

Consider Starting a Business

While starting a business from the ground up takes serious time and money, if you’ve been working on a startup or other part-time enterprise, you’ll reap tax benefits. A business of any size functions as a tax haven because of the many deductions available. Even if you work out of your house, you can deduct home office costs among others, such as office supplies, travel costs, office equipment, and meals. 

Work With Tax Consultants

Take advantage of services available from your Encino tax consultants. Getting professional tax prep help ensures every possible deduction gets subtracted and all forms are filled out correctly. Tax professionals also identify creative ways to save, such as looking into Roth IRA tax contributions or refinancing your mortgage to score a lower interest rate. Charitable contributions also provide tax benefits. 

For more information about tax services from Wallace & Associates, contact the accountant service in Los Angeles today.