Are You Prepped for Tax Season?

We make the same tax declaration every year, “I’m going to start early getting ready for tax season” . But more often, we do exactly what was done the previous years, wait until the eleventh hour to prepare. This year will be different because I’m going to help you plan early so let’s get started.

Follow this list of five pre-tax secrets to get you started.

Review the Prior Year Tax Return: You should be able to quickly summarized what has changed from last year to the current. Will there be a significant change in income, do you understand why? Did you request funds from your 401k or retirement account last and not this year or vice versa? Have you started or closed a small business, did you follow the proper procedure? Identify what you know to be different and gather your documentation.

Maximize Your Retirement Deposits: Employers account for 401k and options for retirement should be reviewed. By maximizing the amount you contribute allows you to take advantage of the tax benefit, however, this will have to post by December 31st. With a SEP and Roth IRA contributions can be made until April 15th if you choose this option.

Track Charitable Contributions: This is the itemized deduction if you don’t track throughout the year you will end up trying to remember what you donated 8 months ago. If you didn’t list what was donated and attached it to the receipt then make it a point to start next year, seriously. As you contribute use to track your donations and remove the stress of trying to remember.

Quick Research: Tax laws change each year so make quick research for new tax laws and determine how many pertain to you. Most tax software will have the updates and prompt you accordingly but it helps to understand and anticipate the change.

Review your Filing Status: During the course of a year lives change and so could your filing status. Update marital, dependent and location to determine the changes you may need to adjust.

The IRS encourages filers to get a headstart on gathering tax documents and information. Verify your contact information is up to date with your employer to avoid a delay in receiving 1099 and W2 income forms. Decide if you going self-prepare or use a tax professional and reflect on how that decision served you last time. And that rat nest of receipts you have, its time to dig in.

 Invest in You.