It’s halfway through the year, and there’s no time like the present to start thinking about next year’s taxes. With six months left to accumulate and organize your tax documents, starting to prepare early will only alleviate stress and aggravation when tax season arrives. The following five tips can help you make filing your taxes next season a breeze.
- Correct Withholdings: If you work for an employer, you should ensure that your withholding information is up to date and accurate. You may either be paying too much in taxes with each paycheck, or you may not have enough withheld, causing you to owe more at tax time. Check with your human resources department and fix any errors.
- Previous Returns: Just because last year’s return has been filed, it doesn’t mean you should just toss it aside. Be sure to file it away safely, complete with all your supporting documents like receipts, as you may have to refer to it in the future. Keep it separate from the current year’s taxes.
- Filing System: Organization is key to keeping your stress level low at tax time. Keep all of your tax documents in an organized filing system, separate from previous years’ returns. As you incur expenses, you can label and document receipts individually, instead of having one big pile to sort through at tax time.
- Documentation: If you plan to take deductions, you’ll need documentation such as receipts and other proof of your expenses. Additionally, other tax forms, such as a 1099 or an investment statement may come into play when you are filing your return, so ensure that all of your documents are up to date, accurate, and filed safely in a secure location. You’ll save yourself the hassle of having to locate duplicates at the last minute.
- Target Date: Establish a date, which will most likely be in the first few weeks of February, as most tax documents will be received by then, in advance to have your return filed. By setting a target date, you’re likely to prepare ahead of time.