Next Year’s Tax Preparation Starts Today

You’re probably not thinking about filing next year’s taxes already, but if you start organizing your documents now, you can avoid a lot of stress and headaches when the next season comes. Tax preparation doesn’t begin on January 1st, but is instead a year-round activity that can make filing your taxes a breeze when it comes time. If you want stress free filing, follow these five tips throughout the year:

  1. Make Sure You Have The Right Withholdings: You should check with your human resources department or finance office to ensure your information is up to date and accurate. You may owe taxes or you may be paying too much, so it’s important to double check your W-4.
  2. Keep Your Old Returns Safe: Even though you have already filed last year’s return, it doesn’t mean you can forget about it. Instead you should store them in a safe place with all supporting documents, as you may need to refer to them again. Just be sure they are separated from this year’s tax documents.
  3. Establish an Organized Filing System: By creating a simple filing system for your taxes and receipts, you can eliminate a big headache at tax time. Don’t just stuff everything into a single envelope. You’ll find it’s easier if you label and sort your as they accrue rather than trying to figure it all out when filing.
  4. Keep All Documents Together: It’s not just your W-2 that is important at tax time. You may receive other documents from your employer such as a 1099 or an statement. By keeping these in a safe and secure location, you won’t need to find duplicates last minute. Also, be sure to keep all and documents pertaining to deductible expenses.
  5. Decide the Date Early: Mark your calendar with a committed date, most likely in February when all tax documents should have been received. This way you have a goal, and you’re more likely to prepare ahead of time.