Taxes don’t have to be stressful.
Staying organized is the best way to make filing taxes easier. Whether you decide to begin early, use a digital system, or track regularly there are plenty of things you can start doing today to alleviate your stress in the future.
In the article below, we’ve compiled a list of our top organizing tips, given by CPA’s, so you can have a stress-free season.
1. Gather Documents Early
Gathering documents when you’re under a tight deadline inevitably causes panic and stress. When this happens, people tend to forget things like required forms, due dates and earnings. To avoid this stress, begin gathering your documents early in the tax year.
Things like W-2s, 1099s or earning statements (from investments, inheritances, etc.) should all be stored away as soon as they become available. That way, you have all the information ready and organized for when you start the paperwork.
2. Track Deductibles and Expenses
Another tip to keep you organized throughout the year is to actively track expenses and deductibles. This would be things like charitable donations, medical expenses or business-related purchases. Simply file each receipt in a folder or save a digital copy to your computer/tax app as you receive it. An easy way to tackle this is to head through your accounts on a monthly basis to spot any of these transactions. Then, once the year is over, you will already have a detailed record of all your purchases without having to head through your records.
3. Use a Digital System
Maintaining a digital filing system for your tax documents inevitably makes filing them easier. This system does not need to be complex and can simply be a secure file folder on your computer where things like previous returns, bank records and receipts, are all kept in a single place.
For those wanting a more intense form of organization, consider using a software system like Quickbooks which was specifically designed to help people with taxes. Not only is it an industry favorite that’s easy to use but it offers features like automation that can help you keep on top of things. For example automatically filing receipts into the correct category or sending you reminders of filing dates so you don’t end up missing things or spending hours trying to get the information you need.
4. Save for Your Bill
There is a chance you will owe the government money once your taxes are submitted. For those that are expecting to owe, being unprepared to pay this bill could have a devastating impact. To avoid this financial strain, CPAs suggest that you put a little money aside each month so you have funds readily available to pay.
5. Consult a CPA
Once tax season hits, many CPAs won’t have the capacity to take on new clients. So, be sure to visit an accountant early in the season to get an appointment. Speaking with a professional earlier is also recommended in case they need you to gather more documents and receipts.
Plus, these professionals might identify potential tax-saving opportunities while they are going through your accounts. But these suggestions (like donating more, shifting money into a tax-deferred account, etc.) take time to do, which you might not have if you waited until the end of the season.
If you want to get organized this year and need professional help to get started speaking with us at 407-328-5001.
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