Getting a head start on the next tax year helps relieve some of the stress of preparation. Below you’ll find a list of the some of the steps you can take to be extra prepared for the next tax year.
Make Valid Predictions
While you cannot predict the future, you can predict what may change regarding your tax situation. For instance, perhaps you are planning to purchase a new home, move to a new location or add a new member to your family. All of these instances can and will change your tax situation slightly.
Take a bit of time each quarter to keep up on itemizations. You can create a spreadsheet with running tallies which will help you produce totals for tax time. This is especially important if you have a lot of out-of-pocket medical expenses or self-employment or business expenses.
Keep all of your tax deductible receipts in one general area. It is ideal to categorize the receipts and put them in the proper file for organizational purposes. If you take the time to do this throughout the year, it can take days off of the tax preparation process.
Scrambling at the last minute to find all of your necessary documents and receipts adds frustration to the tax preparation process. Along with these few practices, also take some time to refresh yourself with tax laws and new deduction opportunities which may become available. Tax codes change over time and often taxpayers are unaware of additional deductions they may qualify for. Subscribing to tax-related newsletters helps to stay on top of important tax related topics.
Image credit: Alan Cleaver