Tax season is right around the corner, which means it’s time to file your taxes. An accountant can help you file your taxes, or you can file them yourself. Either way, there are some important tax dates you need to know about in order to ensure that you pay your taxes on time and maximize your return.
The United States tax year runs from January 1 to December 31 of the same year, which means that U.S. taxpayers file their taxes every year by April 15 of the following year. In the same way that federal holidays affect tax deadlines for everyone, Washington, D.C. holidays also impact them.
What Are The Requirements For Filing Taxes?
To be eligible to file a tax return with either federal or state governments, you must earn at least $10 of taxable income in any given year. You may also need to make a minimum amount from employment, investment, or other activity that falls under taxation rules.
In some cases, this requirement may be waived, such as your income below certain thresholds due to hardship. The IRS has more information about filing requirements and whether you qualify for an exemption on its website.
If you’re still unsure whether you’re required to file a tax return, contact your local IRS office directly.
When Does Your Tax Return Have To Be Filed?
You have until April 15 to file your taxes (or April 17 if it falls on a weekend or holiday). An extension can be requested from the IRS through Form 4868. The agency then has six months to process your request, extending your tax-filing deadline to October 15 (or October 17).
You should note that getting an extension doesn’t extend your deadline for paying any taxes due for that year, nor does it relieve you of your duty to pay estimated taxes quarterly.
It also doesn’t mean you won’t be audited; extensions are more likely to attract scrutiny than other returns. If your income was below $100,000 and you have no complications with your tax return, however, the chances are good that you won’t be audited at all.
And even if there is an audit, the chances are good that it will be resolved without too much trouble—about 90% of audits result in no change to what was initially filed.
When Should You Start Preparing For Your Tax Return?
Many people think that January is when they should start thinking about their tax return, but when should you begin preparing? Here are a few factors to consider your income, whether or not you have dependents, and how much time you have left before the application deadline.
As with most things in life, there’s no one-size-fits-all answer. However, if any of these two scenarios apply to you—and we’re assuming they do—it’s time to get started on your taxes.
If you make more than $66,000 per year
If you make more than $66,000 per year as an individual or $132,000 as a married couple filing jointly, you’ll want to start gathering information for your tax return. It includes everything from W2 forms to 1099s and 1098s (mortgage interest statements).
If you have kids
Several tax credits are available for parents, including child care expenses and dependent care benefits. And while you don’t need to wait until April 15 to claim them, it makes sense to gather all necessary documentation to submit your return as soon as possible.
How Long Does It Take To Prepare Your Tax Return?
Tax preparation is a complicated process that often takes a long time. It can result in a less accurate return. Many individuals put off their returns during tax season as they get busy with work and other events.
The way to avoid procrastination is by setting aside time for your taxes ahead of time. For example, set aside one day per month during which you will spend an hour or two working on your return. You may want to hire a professional if you are uncomfortable doing the work yourself.
While it may cost more than doing it yourself, paying someone else to prepare your taxes could save you money if you find any deductions or credits you would have missed otherwise.
For years I have studied American finance regulations. All the information in this blog is sourced from official or contrasted sources from reliable sites.
Salesforce Certified SALES & SERVICE Cloud Consultant in February 2020, Salesforce Certified Administrator (ADM-201), and Master degree in “Business Analytics & Big Data Strategy” with more than 13 years of experience in IT consulting.