A New Tax Season Has Begun!
Filed under: Taxes and Planning
Tax season has just ended… but with it, a new tax season has begun! Smart taxpayers know that “tax season” actually lasts all year. And if you don’t wait until the last minute to prepare, you won’t become so pressured and stressed when it’s time to file your taxes.
Take these steps throughout 2015, and you’ll be better prepared – and less hassled – in Spring 2016.
Talk to your accountant. Don’t wait until April 14 to call your accountant with important questions. Regard your tax situation as a matter that deserves your attention throughout the year, and you run less risk of mistakes or regrets next spring. When you have questions, make a note of them, and give your accountant a call well before tax time to discuss them.
Revamp your filing system. Did you have a hard time digging up old receipts and account statements this April? If so, you need a better filing system for important documents. If you want to go high-tech, scan everything and upload copies to a cloud storage system. Or, you can keep paper documents neatly filed and stored in a fireproof box. Either method is fine, but establish what works for you and be consistent.
Establish a charitable contributions budget. When you sit down to begin working on your tax return, it can be very difficult to remember every charitable contribution you made throughout the year. Establish a budget for giving instead, and write a check once per month or quarter to your favorite charity. Then keep those receipts in your new filing system.
Adjust paycheck withholding. If you were shocked by a large tax bill this spring, you should probably adjust your paycheck withholding throughout the year. This way you pay more of your taxes upfront, and you don’t have to write that enormous (and depressing) check in the spring. Or, if you’re self-employed, begin paying your taxes quarterly throughout the year. Talk to your accountant about setting up a payment plan.
Evaluate your retirement savings plan. Are you taking full advantage of all tax-advantaged retirement savings options? If not, don’t wait until the last minute to open and fund an IRA. Contribute the maximum amount per year, and you’ll have fewer tasks to accomplish at tax time next year.
Create an account at IRS.gov. The IRS website can become flooded with traffic during the spring. Create an account sometime this year, and you’ll enjoy easy access to your records in future years.