tax planning

4 Reasons you Shouldn’t Wait Till the End of the Year for Tax Planning

Most of the people plan their taxes when the season is about to arrive. The reason behind this habit is to apply strategies to save tax, which ultimately don’t work and sometimes triggers the IRS audit.

Every entrepreneur, established firms or freelancers want to save their taxes and refunds. So don’t wait for deadlines, get a head start to file early in 2019 by following these four key areas.

1- Stock market – It’s true that many business owners are investing in stocks and getting huge profits and sometimes facing losses as well. To equalize gains, strategies like selling losing positions can help you produce tax losses that can balance your benefits on other investments. But if you wait until the end of the year, your stocks will be deteriorated even further, making the losses even more severe.

Hence it is better to face a small loss rather suffer from a big one and planning earlier for your taxes can make it a lot easier to spot losing investments and get rid of them before they can do further damage to your portfolio.

2- The second one is to get a faster tax refund by filing your tax return electronically with direct deposit into your account. With paper returns it may take a long time, a couple of week’s maybe. You can file your taxes with Turbo Tax to get the fast tax refund.

3- In case you are preparing to purchase a house or going back to college. Early prepared tax returns provide you with valuable information, which can assist you with all the necessary paperwork. So if you have planned for purchasing a house, you have to show your filed tax return to prove your household income. College students can apply for financial aid by getting information from 1040.

4- No need to file tax extensions. Even if you file extensions rather than paying on due dates, the IRS will charge you interest and penalties on your outstanding tax debt, until you pay it. An early tax return preparation can help you avoid this deduction.

Now, you might be thinking about, how soon you can file the taxes?

You can file your tax when you have proper information and documents. The IRS will officially announce the accepting return date, which will be most probably in the mid of January 2019 and deadline will be in the midst of April 2019.

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