Like me, you're probably still recovering from the holidays, trying to get back into the swing of your normal routine. I'm sure the last thing you want to think about right now is tax season. Unfortunately, tax season waits for no woman. Your best bet for having a relaxed tax season is getting ready for it now.
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Even though you might not be thinking about filing your tax returns quite yet, you should keep the following deadlines in mind.
1. Jan. 17, 2011: If you are one of the millions of self-employed taxpayers, you need to remember to make your final estimated tax payment for 2010. These payments are usually due by Jan. 15. Lucky for you, the 15th is on a Saturday, so you get two extra days to send your payments. If your end-of-the-year tax calculations show that you might owe an additional tax debt, you can make a bigger payment here to reduce the bill come April.
2. Jan. 31, 2001: If you had any employees during 2010, you need to mail out all W-2s no later than Jan. 31. If you hired any outside contractors to perform work for you during 2010, you will need to send out 1099s for each one (for any services valued over $600) by that date. Finally, if you haven't been depositing federal unemployment tax payments during 2010, they must be deposited now. You'll need to file Form 940 by Jan. 31.
Once you are set to meet these deadlines, the next step is to aim for these tax season organizational benchmarks:
1. Organize Your Documents. I say this all the time but cannot stress enough how crucial being organized is during tax season. Every person who is waiting in line at the post office at 11:59 p.m. on April 15 has the same problem: He or she is disorganized. Organization is not something you can fake or slop together at the last minute. If your filing system consists of crumpled-up bits of paper shoved in a shoebox, take some time during January to look at those receipts, statements and forms, and put them into some reasonable order. Doing so will help guarantee you a smooth, relaxed tax season.
2. Find a Tax Preparer. If you do not have a good tax preparer, now is the time to start looking. Entrepreneurs' tax returns can be complicated, and if you are not 100 percent certain you can do your taxes on your own, you should consider finding a tax preparer or accountant who specializes in small-business taxes. It's best to find one who is well-versed in your specific industry. Remember, if you wait until February or March, all the tax preparers are going to be overwhelmed with work and may not be taking new clients.
I know, April 15 sounds like it's a long way off. In reality, however, Tax Day sneaks up on you faster than you can imagine. By meeting those two deadlines and taking those two simple steps, you will be totally prepared for a hassle-free tax season.