Top 5 tax tips for Individuals

personal tax tips

None of us gets out of filing our taxes and dealing with the IRS – it’s one of life’s certainties. Taxes can be complicated and intimidating, so here are five expert personal tax tips to make them a little easier to manage.

1. Never ignore the IRS

People who ignore the IRS do so at their peril. If you don’t file or pay your taxes, or do either of these after the stipulated deadlines, you could face hefty penalties and the IRS can seize assets. If you receive any communication from the IRS, pointing out any errors or missed deadlines, respond immediately. The worst thing you can do is ignore it.

2. “Bunch” your deductions

To ensure you can take the maximum deductions applicable in a particular year, you can “bunch” them together. What this means is that you time your deductible expenses into the same calendar year. You can achieve this by moving forward certain deductions from the current year into the next, assuming that you meet the thresholds for the current year.

3. Max out your retirement plan contributions

Whatever you are paying into your 401k or other tax-deferred retirement scheme, do your best to increase your payments if you can. The money you pay into these accounts reduces your tax liability. You won’t have to pay taxes on it until you withdraw it. This excellent saving incentive is also a great way to lower your tax bill.

4. Be careful of tax scams

If you start getting phone calls or emails claiming to be from the IRS or the U.S. Treasury, do not respond to them. It is quite common for scammers to try these tactics as tax season approaches. Be careful not to fall into their trap. Don’t worry though; it’s pretty easy once you know that the two government institutions will never contact you in this way; they will only reach out to you by mail when necessary.

5. Get the help of a certified public accountant

Tax laws and procedures seem to get more complicated by the year. Even if you successfully manage to file your own taxes, you may very well not be getting the full benefits of the various deductions and tax breaks that might be available to you. Get the help of a professional when it comes to filing your taxes. It takes the burden off your shoulders, ensures that it gets done correctly, and may help you get more money back into your pocket.

Georgen Scarborough CPAs is based in Vienna, Virginia. Aside from offering expert personal tax tips, we can help you with your tax preparation and filing. Contact us today.

How using a CPA can save you money

CPA

Most businesses are happy to let their in-house accountants run their financial affairs alone. However, a CPA can help you optimize your business and tax matters with a level of professional service that your accountant may not necessarily be able to deliver. Most importantly, the services of a CPA could potentially save you a lot of money. 

One of the reasons why a business owner might avoid hiring a CPA is the cost involved with securing this service. The truth is that, while a CPA may increase your costs in upfront fees, they will also offset those fees to a large extent through the savings they are able to create for you. 

The cost-saving benefits of CPAs

Having a professional tax practitioner on your side will offer you several benefits, including, but not limited to, the following:

  • They can help reduce your tax liability. 
  • They can do your tax planning in an efficient and timely manner to avoid any surprises.
  • They help you set up deferred savings programs to enable your business to maximize tax advantages.
  • They can advise on changes and improvements to help you increase your business’s profitability.

The financial situation is constantly in flux, with both your business circumstances and the legal frameworks changing regularly. A simple mistake or failure to keep up with the changes can lead to problems with the IRS, possibly resulting in penalties, interest, even legal trouble. If you bring a certified public accountant onto your team, you can either avoid such issues or have the means to deal with them most efficiently and with the least possible damage when they do arise. 

Georgen Scarborough CPAs is based in Vienna, Virginia. Contact us for more information on how we can help you save money.