What You Need to Remember When Filing Taxes

Filing taxes can be a hassle. You have to ensure that you have accurate records of everything you earned as well as a record of things you have purchased. The amount you get taxed can be enormous if you are not careful. This is why it is important to consult with a professional so that you don’t get overwhelmed.

Making the right consultation with a tax accountant in Oakville can be the easy choice for you. An accountant can check how much you need to pay in taxes. But more importantly, they can also determine if you are due for a tax deduction or a refund based on your purchases.

First Things First

What you need to do first is organize your records. You need to ensure that you have listed down all sources of income you have incurred in the past year. There should be some sort of paper or digital trail of the money that has come into your account. This will be the basis of your taxes.

Next, you need to have a receipt for every kind of purchase or transaction you have made in the past year. Remember, if you do not have proof of your transaction, you cannot claim a deduction if it’s valid. Go back to the businesses you made the purchase from if you have to so that you can secure a copy of your transactions.

Organize all of these records and make sure to label them properly. This will make it easier to identify what cash came in and what came out. It also makes it easier to calculate taxes and any deductions that you are eligible for.

Get Down to Business and Calculate

If you are familiar with taxation laws, you can actually work out the income and expenses that you have had in the past year and work out what you actually owe the government. But more often than not, people miss out on tiny details that a tax accountant in Oakville or one online may spot, and it can spell the different between $50 and 500 dollars in taxes or deductions. It is better to make sure to get a professional to help you.

Standard Deductions vs. Itemized Deductions

Once you have all your records straight and you have a professional to help you, the next step would take a look at what deductions you are eligible for. The government allows for two types of deductions: the itemized and the standard deductions.

A standard deduction is a deduction you can request for a flat amount. This allows taxpayers to declare part of their income that will not be subject to taxes. You have the option to choose this versus an itemized deduction. However, you cannot choose both especially if you are a married couple. If one chooses standard deduction, you cannot file for an itemized and vice versa. By choosing a standard deduction, you allow for hassle-free decision and a flat rate of how much of your taxes will be deducted.

Itemized deductions, on the other hand, allow you to file a deduction based on your expenses. This means that you need to have a record of everything you have spent and file them to get the deduction. This may be more tedious, however, can yield a larger deduction. Make sure to consult a professional to see which option is best for you.

Taxes can be easy if you know what to do and if you ask for the help of a professional.…