Steps to Take Now to Prepare for Tax Season

posted in: Money Blog

By Guest Blogger, Dolly Santos

Nobody enjoys tax season. The key to a more pleasant experience completing your taxes is to get prepared now. There are many things you can do now to not only make things easier but perhaps even save money next tax season. Below are some ideas to help you get set for next year’s tax season.

Where to Start

Preparing for Tax Season...
Image via Pixabay by stevepb

Be sure to keep all of your tax forms, statements, last year’s return, and any relevant receipts in one safe place – like an envelope or folder – that you will remember when tax season rolls around next year.

Also be sure you have all of the information necessary for any charitable donations you made. If you don’t have receipts or paperwork to prove your donations, contact the charity to ask for proof.

Most people know their Social Security number, but document now, in one place, the number for each of your dependents and store it in your tax envelope or folder. Make any other notes you need, such as important dates. Did you move or purchase property? What did you pay? Be sure to include all of this information wherever you’re storing your essential tax documents.

This is also the time to find a tax preparer. One great way to find someone is to ask your friends and family who they use and if they’re satisfied. Another way to find a qualified tax professional is to go to the IRS website. They have a searchable directory that will help you choose a tax preparer who holds professional credentials that are recognized by the IRS or those who hold an “Annual Filing Season Program Record of Completion.”

If you choose not to use a tax preparer, you could use a software program to prepare your taxes. Again, be sure to have all of the necessary paperwork in order to maximize your savings and avoid an unpleasant audit.

Thing to Do to Potentially Increase Your Refund

Have you thought about changing your tax filing status? You can change your status if there’s been a change in your family, such as marriage, divorce, or having a child. You can also change your status if you want more money to be taken out of each check so that you may get a larger refund at tax time. Another idea is to open a Roth IRA or make contributions to an existing one. Any contributions will count as long as they’re made before the end of the calendar year for the current tax season.

Are you a small business owner? There are several deductions you can claim to save money on your tax return. Hire a family member, for instance. You can even hire your children and have them do small, legitimate jobs, and the cost of their salaries can be deducted. Remember to take advantage of entertainment and travel expenses. If you have business lunches, 50% of the cost can be deducted as long as it’s not a lavish expense. You can also deduct your business phone use and take a home office deduction. Don’t forget to deduct expenses for any business use of your vehicle, including gas. And there are many homeownership-related deductions, especially if you work out of your home.

As you can see, taking just a little bit of time to get prepared now can make tax time next year a lot less stressful. Get all of your notes and paperwork together, figure out how you’ll prepare your taxes (tax preparer or software), and check into a few ways to increase your refund. Do these things and you will be in great shape (and less stressed) for next tax season.

Dolly Santos is an information junkie. She loves researching and learning about new topics. At Dollymath.com, she compiles thoughtful educational articles based on her conscientious analysis of available information.