Timely Tips for Tackling Taxes
Taking action now is the best way to avoid the stress associated with a last-minute tax filing.
These habits can help you beat the odds and make your resolutions stick:
Even though Tax Day for most filers is three days later this year (due to the observance of the Emancipation Day holiday on April 15 this year), that only leaves a few short months to get your taxes filed and to anticipate any potential refund. Taking action now is the best way to avoid the stress associated with a last-minute tax filing. By taking the following steps now, you will be breathing a lot easier when tax time comes around:
Talk to a tax professional
If you choose to engage the expertise of a tax professional to ensure that you optimize your tax situation, the time to do so is now. This will allow you to make an appointment with your CPA and enough time to gather your needed information without breaking a sweat.
Collect and consolidate your information
Gather all of your tax-related documents in one place. These generally include receipts for charitable donations, business expenses, property tax records, and medical bills. If this step is difficult, make a mental note to organize your tax documents as they accumulate next year.
Create a tax information center
Chances are, you will receive additional tax documents by mail and email in the next few weeks such as a W-2 from your employer or a notice from your bank showing the mortgage interest you paid. As these documents and emails come in, add them to the collection that you created in step 2. This will help you find them easily when you’re ready to file your tax return.
Decide if a retirement and/or education account contribution is in order
If you have the means, consider contributing to your retirement fund or an education fund. You can contribute to eligible retirement and education accounts before the April 18 tax deadline and get a deduction for the tax year. This is an ideal way to maximize your contribution limits, and reduce your tax burden. Be sure to check with an accounting professional to ensure you are in compliance with eligibility limits.
Prepare yourself to pay additional taxes at filing time
By getting a jumpstart on your taxes, you should be able to ascertain if you will owe a significant amount of unpaid taxes. If you think this is the case, now is the time to start saving. Start making some adjustments to your budget where you can. And, of course, consider adjusting your tax withholding or estimated tax payments (if you are self-employed) so that you can correct the situation for next year. Being prepared is one of the best tax strategies you can have. While you may think that tax season is months away—it will come around quickly! By taking a little time now to complete the steps on this checklist, you’ll be a lot less stressed when the April tax deadline is here!