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The BEST Time to Start Your Taxes is NOW

The BEST Time to Start Your Taxes is NOW

Think it’s too early to start thinking about taxes? Think again! There’s no reason tax prep has to happen at tax season, and the smartest financial planners keep tax season in mind year-round.

Here’s how you can take advantage of your time to get a jump on your taxes!

Keep your files organized

During the year, make organizing your paper trail a priority. Saving and filing your receipts can save you hours of frustration later, so keep an eye on your documents. Information like donations, receipts, financial contributions, previous tax documents, and filing status documentation are all important to have around.

And don’t worry as much about the method of organizing, just focus on keeping them all in a centralized place. Even a simple paper folder with your yearly documents works great loosely grouped inside works. Even better, pick up an inexpensive plastic folio folder and organize with tabs.

Know which paperwork you’re going to need

Depending on your work situation, keep an eye out for what documentation you’re going to need. Most commonly, you’ll be expecting your W-2s and 1099s. If you work freelance or have switched jobs multiple times in a year, you may have a lot of these, so it pays to keep track of which ones you’re expecting so you don’t miss any during filing season.

Collect personal information

Nothing is more stressful than scrambling at the last minute to find a social security number for a dependent. Before tax season starts, collect the relevant personal data for the people you’re filing for and keep them in a single, secure place. Keep track of things like the dates you moved, information about property purchases, and anything to do with your expenses.

Stay on top of your tax credits

Did you get married? Have a kid? Lose a spouse? Put a child through college? Life’s changes often bring changes in taxation and filing status, so take time in advance to learn about your new status. You can see updated information about tax credits and deductions on the IRS website, or, if you’re not sure, ask a pro!

Know what your plan is for your refund

If you’re expecting a refund, have a frank conversation with yourself and your spouse about what you’re planning to do with the money. Do you want to keep it all? Should it go toward a debt, or straight into savings? Alternately, you can consider adding your refund towards next year’s taxes, which means you’ll have a bigger refund next year but you will not receive anything in return this year. If you’re the type to think even further ahead than that, you can contribute it directly into a retirement or savings account.

But no matter what you choose, spare yourself a messy argument about money by hashing the details out ahead of time.

Talk to your tax preparer

Our final tip? Drop your tax preparer a line to let them know to expect your business this year. This keeps both parties in the loop and adds an element of accountability to your planning.

Or, if you don’t have a tax preparer, ask around! Now’s the perfect time to connect with licensed, reputable tax preparer who can serve you and your family.

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