Given that we are one week into January, it’s time to start planning for tax filing season. It’s never a fun time of the year, but it doesn’t have to be entirely painful. Here’s what you can do now to help prepare for the big day, Monday, April 18, which can help ensure it is as painless as possible.
Tax filing made more simple
- If you haven’t made a file of all your tax-related documents, now is a good time. For non-sensitive documents, consider setting up a Dropbox account for easy file retrieval.
- Make a spreadsheet of the tax filing forms that you anticipate to receive (W-2s, investment statements, bank statements, mortgage interest, etc.) In the past, financial institutions and employers typically had until 1.31 to provide their corresponding tax forms. However, with even more recent complexity added to the tax code, statements have been delayed until February (from my experience). So, you will want to be sure you have all of your documents before filing.
- Begin gathering documentation for any deductions to which you can make: donation photos, charitable organization forms, etc. Anything that will supplement the filing process.
- Register for tax software, such as H&R Block or Tax Act. These programs are an absolute must for filing taxes, and depending on your filing status, tax filing might cost little to nothing at all. And, running through the list of questions they ask might help you identify tax credits and deductions for which you might not be aware. Examples include, education credits, child care, substantial health care costs, and charitable giving.
- Mark your calendar. You don’t want to be late on your tax filing as you can expect fines, penalties, and other headaches.