Prepare Early for Tax Season

No one likes to think about their taxes before it is time.  However, with a little early preparation, tax time can be here and gone before you know it.  With a little organization and planning before tax time, you can avoid many of the stresses and strains accompanying a rush to get your return filed on time.

Here are a few ways to prepare ahead for tax time.

·Make use of a well-organized and accurate filing system.  Use a program like Quicken to keep track of everything electronically, but also use a fireproof box or safe-deposit box to hold all your receipts and documents instead of having to hunt for them at tax time.  Remember that if you are audited, your electronic records won’t do much good.  The Internal Revenue Service wants to see hard copy receipts, bills, and statements to support your claims.

·Only hang on to the really necessary documents.  You don’t need every bill or bank statement when filing time comes.  So, get rid of the unnecessary paperwork now so you don’t wind up pawing through it all when it is time to file your income tax return.  Be careful, however, not to discard anything you might need later.  The best policy here is if you are unsure about the importance of a bill, statement, or a receipt, hang on to it.

·Whenever you buy something or pay for something you believe will be a deduction, write it down and store the receipt in that fireproof box or safe-deposit box.  This way you’ll have a master list so you only have to deal with the important receipts when the taxes come due.

·Know the exact amount of your income, especially if you have more than one job.

·Keep all tax related materials in the same location so you don’t have to hunt all over and gather them together come April 15.

·Keep a running total of your receipts.  By now you should be saving only receipts relevant to tax credits or deductions.  If you keep a running total of those receipts throughout the year, you won’t have to tally them all at once when you prepare your income tax return.

·Seek out tax experts in advance.  If you have important questions about your income tax return, seek out professional advice in advance of the tax season.  Tax experts and consultants are kept very busy in the months just proceeding and just following April 15.  Get their advice early, while they are not too busy to give you a well reasoned answer.