Taxes Filed – What To Do Next!

Taxes Filed – What To Do Next!

So, you have finally filed your taxes, your anxiously awaiting your return or in some unfortunate situations, trying to figure out how to pay back what you owe the IRS. Remember, that what you do after you file your taxes is just as important as what you do before you file.

Refund: If you received a refund, consider what you will spend it on. Will you save for the following year, pay off unnecessary debt or will you finally take that desperately needed vacation?

Do you owe? Make plans now to start paying off any IRS debt, don’t build up any additional interest if at all possible. The IRS Fresh Start program makes it easier for taxpayers to pay back taxes and avoid tax liens. Even small business taxpayers may benefit from Fresh Start.

You can also set-up an Online Payment Agreement with the IRS if you owe $50,000 or less in combined tax, penalties, and interest, and filed all required returns. You may also qualify for a short-term agreement if your balance is under $100,000. Once you have set-up a payment arrangement – the IRS will give you the ability to Pay online through a bank account or debit/credit card.

Start Collecting and Saving: Collect things during the year that you’ll need to file for next years taxes. Examples include bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks or other proof of payment and any other records to support deductions or credits claimed. You should typically keep records relating to property at least three years after you’ve sold or otherwise disposed of the property. Having a designated place for tax documents and receipts is a good idea. It will make preparing your return easier, and it may also remind you of relevant transactions. Good record keeping will also help you prepare a response if you receive an IRS notice or need to substantiate items on your return if you are selected for an audit.

If you have questions throughout the year – its okay to contact your accountant or tax advisor. They are there to help even before issues arise, so take advantage of their knowledge and expertise, so you know what to prepare for now. This includes understanding what new changes in your life will mean for your filing status. Your filing status is used to determine your filing requirements, standard deduction, eligibility for certain credits and deductions, and your correct tax. There are five filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household and Qualifying Widow(er) with Dependent Child. There’s much more information about determining your filing status in IRS Publication 501, Exemptions, Standard Deduction, and Filing Information.