Once you’ve filed your tax returns and tax time has officially passed for the year, you may be tempted to file away the return and keep that file closed for another year. While taking a long break from your tax file sure seems well-deserved, you could be saving yourself valuable time (and possibly even money) if you use this time to prepare for the next year’s tax return. Here are a few ways that you can use this tax year’s down time to better prepare yourself for the next tax season.
Review Your Withholding Status
Now that you have last year’s return to review, take a good look at your return to determine if you need to make an adjustment to your withholding status. If you had to pay a large amount to the IRS, you will want to consider increasing your deduction from your paycheck to avoid having to pay a large tax bill again next year. Likewise, if you were entitled to a significant refund, adjusting your withholding to increase your monthly income will allow you the benefit of those extra funds as you earn them rather than having to wait until the following year. If you experience or anticipate major life changes that affect your tax status such as getting married, having children, or relocating, you will want to learn exactly what impact those changes will have on your return and prepare now for those changes.
Organize Your Documents
Stay ahead of the game by organizing and filing your tax-related documents and receipts as you accumulate them throughout the year. When April rolls around, you’ll have all your documents in one place, rather than having to scramble to find various tax deductible receipts. We all know that feeling when we are faced with listing our deductible contributions but wondering exactly how to obtain another receipt because the original was misplaced. Organization is the key to a smooth, headache-free filing, you will thank yourself in April for all the effort you put into organizing today.
Work On Your Contributions And Deductions
Rather than wait until year end to contribute to charities, take the time that you have all year to work out a schedule for your contributions and any deductions you might want to take. This is a good time to reevaluate any contributions or deductions from the previous year to assess their suitability for the current year.
Keep Your Checklist Current
One simple step you can take to make tax preparation time go more smoothly is to keep an updated checklist of the forms, receipts, and tax-related documents that you will need to complete your returns. A checklist will easily guide you through gathering all the documents that your tax preparer will need to prevent delays in filing your taxes.
Rely On Your Professional Tax Preparer
Taking these steps will go a long way in avoiding undue stress and chaos during tax season. But don’t worry, if you’ve found that you’re not fully prepared to tackle your filing, E&Y Tax Preparation Services will guide you through the process. And if you have tax-related questions, there’s no need to wait until filing time, we’re here all year round, not just during tax season. Call E&Y Tax Preparation Services today at (248) 362-1313 with your tax filing questions.