Tax season is quickly approaching, but how prepared are you? While there might be a lot to keep track of during tax time, some proper preparation can go a long way. So, with that in mind, here are some tips on how you can get a head start on tax season.
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1. Gather Information on Your Dependents
Whether they’re your kids or elderly parents, make sure you have their Social Security numbers on hand before starting your taxes. Making sure you have your dependents’ information is a simple and easy way to speed up the filing process. If you’re not properly prepared upon filing, your return may wind up getting delayed and you could miss out on some pretty big tax credits.
2. Get Your Financial Statements Together
You’re also going to want to make sure you have collected all your year-end financial statements. Investment documents, papers concerning charitable donations and mortgage information are all things you should have on hand before filing. In the event you find it difficult to gather all of these documents, you may want to consider investing in a small file holder or cabinet to help you better organize your financial records. Keeping things in order is one of the best ways to make tax season a piece of cake.
3. Call Your Tax Preparer … Today
The earlier you get in touch with your tax preparer the better. People tend to wait until the last minute to set up their tax appointments, so you’re better off locking in your meeting as soon as possible. Plus, the sooner you file your taxes, the sooner you can expect that big refund! Or, at least have one less financial chore on your plate.
Finally, filing early is one of the only ways to minimize the odds of taxpayer identity theft. (You can lower the odds of other types of identity theft by monitoring your two free credit scores each month on Credit.com. A sudden drop in score is a sign your identity may have been stolen.)
4. Determine What You’ll Spend Your Refund on Now
If you’re expecting a big tax refund, you’re better off determining how you’ll be spending it sooner rather than later. Take a look at your financial needs and determine what could best be served by a little cash boost. Are you trying to pay down debt? Close to reaching a savings goal? Is your emergency fund in good shape? Consider setting percentages on how you’ll spend your refund. Setting the expectation for how you’ll use that money now will help minimize the chances you will blow it all on a shopping spree later!
Tax season can be a confusing time, but providing you plan ahead, you can make the process as painless as possible. If you find yourself having great success with this year’s tax plan, you might way to consider making a list of the steps you took to prepare so you can reiterate the process next year. That way, you can continue to have a smooth tax season in years ahead.
Leslie Tayne, Esq., is a consumer and business debt-related attorney and advisor. She founded Tayne Law Group, P.C., concentrating solely in debt resolution and alternatives to filing bankruptcy for consumers, small business owners and professionals. In addition, Tayne Law regularly consults and advises on debt management related issues. Her book, Life & Debt, shows how learning to embrace your debt can help you not only like it, but love it. More by Leslie Tayne