How to Prepare for Tax Return Season in the US in 2024?

Residents of America prepare to report their taxable income to the federal government or sometimes the government of their states between the 1st of January and the 15th of April. This time is usually called the tax return season in the USA. Some residents do their taxes independently, while some hire professionals for tax return reasons. In America, almost 85 million people hire professionals to do their taxes, according to the Internal Revenue Service reports. 

To prepare your tax return reports, your tax preparer may ask for different sets of information, or you may have to fill out the questionnaire for him. Whether you want to do your taxes yourself or hire a professional preparer, this article will provide the necessary instructions to go through the process of tax returns simply and swiftly. 

The following are the recommended steps:

Gather your Documents 

By the end of January, you must have all the documents required to prepare the tax returns from your employers, banks, brokerage firms, and those you do business with. Gathering all the documents on time will help you file a comprehensive and precise tax return. It will also mimic the chances of errors like slowing down the process and refunding times. 

The documents may include:

• You must have bank account numbers and routing numbers

• Social security numbers of those you listed on your tax returns

• Different forms like Form W-2, if you do a job, other 1099 forms will report all of the income you received in the form of dividends, interests, and paid compensations. 

• Various 1098s and 1095-A forms for mortgage interests and health insurance, respectively.

• IRS letters citing any amount you received for deduction or credit. 

Filing Electronically

If you do your taxes manually, there are many chances of human errors while accounting or filing the documents. For this purpose, many specialized software tools are made for the tax returns. They will help you in avoiding the mistakes while doing the math. 

Some software also has the question and answer format, which will help you to understand every section of the return carefully. Taxdome, Karbon, and Canopy are some of the software to file your tax returns. 

Rounding up your Receipts 

You may also need receipts to itemize your deductions or want your standard deduction. If you want to know which will give you the bigger share, add your itemized deductions and compare them with the standard ones. For this, documents like medical cost receipts not covered by health insurance may be required, as property taxes and investment expenses may be necessary. 

Report all Types of Income

All types of income need to be reported, whether you are a job holder or a businessman. It may include

• Goods that you have sold online

• Investment documents

• Part-time work

• Or business activities 

Key Note

Gathering all this information may take some time, but it will ensure you have all the documentation. Make sure you have all the information ready before the tax season is upon you.