DO YOU KNOW YOUR ESTIMATED TAX LIABILITY?One of the most important things to consider is what your estimated tax liability will be. You don’t want to encounter any surprises when you file. By determining your estimated taxes now, you can either make sure you are paying enough before this year is complete, or you can start saving to preemptively cover what you might owe.
First, you need to know what “tax liability” is. Ultimately, it is the amount of taxation incurred by an individual or business based on a taxable event (earned income, interest earnings, sales of assets, etc.) multiplied by current tax rates. The longer you wait to estimate your tax liability for the year, the fewer options you have. Otherwise, starting to prepare now will enable you and your tax preparer to review every detail and explore all the options available.
Here are 3 simple steps you can take now to prepare for your 2017 tax return:
- Consult a Tax Preparer
- Gather All Financial Information
Now, you won’t have all your final W-2s, 1099s and other earnings documents until early next year, but if you keep precise accounting records, you should have accurate information from which to estimate your tax liability. Estimates are based on your earnings so far plus anticipated earnings through the rest of the year. Gather your receipts, make a list of charitable contributions, bring last year’s tax return documents and collect all personal information you may need when filing (such as social security numbers for any dependents).
- Make an Appointment
In order to get a jump on your 2017 tax return and have your estimated tax liability determined, set your first tax appointment as soon as possible. The sooner you start this process, the more options you have. McVay Business Services will make sure no details are overlooked and every aspect of your tax preparation goes smoothly. Then, when you file your return next year, you’ll be prepared for everything that happens. We want to help you maximize your return and avoid financial setbacks that often come with last-minute filings from those who are not properly prepared.
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