As April 18th rapidly approaches, it’s time to get ready for filing your taxes. Tax season is often a stressful time of year; you may not know if you are going to get a return or a tax bill. No matter how your taxes end up, you can make the filing process easier and less stressful by organizing your finances ahead of time. Continue reading to learn how to make sure your finances are prepared for tax season.
Organize Your Documents
When filing your tax return, you’ll have to reference multiple different types of documents, sometimes even your previous year’s tax returns. To make the process of pulling these documents easier, you can devote a file cabinet, file folders, or a file box to holding these documents. Instead of having to search for these documents at tax time, throughout the year you can add to your documents to keep them organized in one place.
Adjust Your Withholdings
If you had a large tax bill, you may want to adjust your withholdings to prevent another large tax bill the next tax season. You may want to do the same if you received a large tax refund so you could utilize those funds throughout the year. To do this, you will have to update your W-4 with your employer. If you are self-employed or a freelancer, consider paying taxes quarterly to prevent getting stuck with a large tax bill during tax season.
Keep Your Receipts
You will need your receipts to provide proof of your tax deductions so throughout the year, add them to your document stash. A couple of deductions where you will need to track your expenses are home office deductions, charitable donations, and mileage logs. By adding your receipts to your files, you will prevent having to search for receipts from a year ago.
Plan Throughout The Year
Tax planning is not only meant for tax filing season but throughout the year. Start by looking at the different tax credits and deductions the IRS has to determine what you qualify for and can claim on your tax return. As the year goes on, you can make sure you have the correct documentation so you can take advantage of these credits and deductions. You may also have to fill out additional forms at task season, so keeping organized on what is necessary for each credit and deduction will make it easier to file your taxes next year.
Having an experienced and knowledgeable financial advisor on your side can make planning your finances more manageable. Contact me for help in building financial goals for the year and ways to assist you in achieving those goals. Email me at email@example.com or call me at 402-454-7204 to schedule your consultation.