Filing Taxes can be burdensome and confusing to most people.
However, there are many things we can do – starting right now – to make things easier and more pleasant for us when we actually file taxes.
Here are five steps you can take right now to make things easier and quick tips to help you prepare for tax season:
1. Prepare a central location for all of your tax documents. It might be a desk drawer or it might be a folder. Just be sure you have one single place for the tax documents you’ll receive in January and February, so that when you do file your taxes, you can easily and quickly find all of the documents you need in one place.
2. Start hitting some tax-oriented blogs. If you’re want to ensure you are getting every deduction and credit you are entitled to, you can start subscribing to solid tax-oriented blogs. Of course check back regularly here at Be Secure Financially and explore our Taxes section.
3. Do a rough estimate. This is the perfect time to do a “back of the envelope” estimate to see whether or not you’re actually going to owe taxes this year. It doesn’t have to be perfect, but it’s a good idea to do it – and to estimate high, so you don’t get a surprise in a few months. Use online calculators to help you anticipate your tax situation post-tax reform law. If you estimate you may owe Uncle Sam, you can still fund your IRA – until April 15 – to lower your 2018 taxable income.
4. Purchase an online version of tax software or install tax software of your choice on your computer. The mainstream tax software packages all do a pretty good job. Get one early, install it, and make sure it’s updated (and you know how to use it) before crunch time rolls around. You don’t want April to arrive and you are struggling to figure out how to use or download the software.
5. Plan Ahead. If you typically owe when you file set aside money now or start saving so the tax bill will not be as much of a burden when it comes due. If you typically get a refund, plan now how you might use it most effectively, perhaps pay down debt, start a savings account, etc., so the money does not just come in to your bank account and you blow it in one shot.