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Are you ready for Tax Day? April 15 is right around the corner, and your taxes will be due before you know it. 2019 can be the year you get all your documents together, file your taxes, and move past April into a stress-free spring. If you want to get your taxes done without any major hassles this year, make sure you don't wait until the last minute. Instead, start preparing right now. Here are six super simple tips to get you ready for tax season.
1. Get Organized
The very first thing you should do to prepare for tax season is organize everything you'll need. Find all your required tax documents, such as W2s, 1099s, and bank and mortgage statements, and then sort them so they're easy to reference later on. Next, ensure you have any other documents you need for tax preparation, such as business receipts, charity donation receipts, or anything else you believe is important. Since you're starting early, make a note of any missing documents and then start to track them down. If you have all the documents you'll need at hand, it'll be much easier when you actually have to prepare and file your taxes.
2. Do Your Homework
After you get all of your tax information organized, you should take some time to review your documents and start thinking about everything you need to do and know prior to Tax Day. You may want to review how changes in the tax code will affect your tax return this year. Additionally, you should consider writing down questions that you want to ask a trusted tax professional or the IRS later on. Finally, if you think you're going to have to request an extension to file or pay your taxes, you may want to research how to do that as well.
3. Contribute to Your IRA (It's not too late!)
If you never got around to contributing to your IRA last year, don't worry; you can still place money in your IRA account all the way up until Tax Day, and it'll count for 2018. This great deal is specially designed for the procrastinator in all of us. Late IRA contribution rules allow you to prepare for retirement and shield some of your income from taxes at the same time. Check with your financial advisor or a tax preparation specialist to determine the maximum IRA contribution you can make for 2018, and then make the largest contribution you can.
4. Get Professional Help
Consider making 2019 the year you start getting help with your taxes. A trusted tax professional, such as a certified public accountant, can be an incredible resource when it comes to preparing your tax returns. An accountant can help you navigate Federal and state tax regulations and assist you with adjusting to all the recent changes in the Federal income tax codes. Additionally, if problems ever do arise with your tax returns, it's helpful to have a financial expert on hand when dealing with the IRS. Moreover, establishing a long-term relationship with an accountant can help you optimize your tax situation over time as your financial situation changes.
5. Plan to Itemize
Unless your tax professional tells you otherwise, you should plan to itemize on your tax return. The minimal amount of work it takes you to prepare to itemize–mostly managing or finding records of expenditures or mortgage interest documents, etc.–can help you reduce your taxable income and ultimately save you money. You can itemize many financial and personal activities; these range from the aforementioned mortgage interest and property taxes on your home to your retirement contributions and charitable donations. Additionally, if you're self-employed or own a small business, it may open you up to an even wider array of itemizing options. Talk to your tax professional as soon as you can, so you can find the best opportunities to itemize deductions on this year's tax return.
6. Take Notes and Get Better
Another thing you should definitely do this year is to keep a journal as you prepare for Tax Day. Write down anything noteworthy that'll be helpful to read through next year when you've all but forgotten filing your 2018 tax return. If your tax document filing system worked particularly well this year, ensure you make a note of it. Likewise, if you had trouble finding all your business receipts, write it down, so you remember to pay closer attention next year. Documenting your work preparing for Tax Day will help you consistently streamline the process year after year.
Filing your income taxes is never fun, but it doesn't have to be dreadful. These six super simple tax tips can help you get organized, get smart, and make the most of your time before April 15 rolls around. Make an effort to get ready now and you'll have a painless Tax Day this spring!