Get Your Taxes Ready NOW For Next Year

While you are working on this year’s taxes, keep in mind what you can do now to make next year’s preparation easier. Even though it may be months and months away, there are actions you can take now to organize your taxes and make the process smoother throughout the year and at tax time.

• What worked well and what could be “tweaked”? If it took time to gather credit card statements, designate a “home” to keep them in one place during the coming year. Separate by card number.

• Set up specific file folders – paper or electronic – and drop or scan documents for next year’s taxes into them throughout the year.
Suggestion: Devote an easily accessible filing box or accordion folder exclusively to next year’s taxes.

• Highlight tax donations in your checkbook and on credit card statements as you check them monthly. (Suggestion: Use different color highlighters to differentiate categories such as for home maintenance and tax deductions.)

• Scan tax receipts using a mobile scanner (such as Neat Receipts or SnapScan. Makes it easy to export data into programs such as Quicken, QuickBooks and TurboTax.

Even though tax season may be months and months away, take these time-saving actions now.

 

Start Tax Preparation Now

 

Try these tips to organize your tax documents and files:

  • Block out appointments with yourself on your calendar to complete the work. Be reasonable about how much you can accomplish at one time.
  • Estimate the time you will need and then double it.

Research filing and extension deadlines … know the IRS dates.

Keep a copy of last year’s return on-hand.

Gather all reported tax forms (W2’s, 1099 dividends, 1099 interest, etc.). Then organize data by type.

Sort data into specific categories: e.g. donations (money and in-kind).

If you prepare your taxes electronically:

You can import last year’s taxes onto this year’s form by using the same software as the previous year.

If you prepare your taxes manually:

Below are sources that may carry the forms you need:
www.irs.gov (Sends them at no charge)
• Some local libraries and post offices
• Office supply stores (for larger quantities)

Use a tax organizer. (Search “tax organizer” on web for free ones to download.)

If your taxes are prepared by a tax professional:

Make an appointment now.

It will be a huge relief to get this job done. Personally, I can’t wait to finish mine.

Close Out The Year: Try This Checklist

  • Start gathering your papers and electronic files needed for taxes. Yes, now. Credit card and bank statements, receipts, anything you will need to take to your accountant. And, speaking of your accountant …
  • Meet with your accountant to review your situation and determine what, if any, actions to take before the official close of the year.
  • Pay outstanding invoices and avoid back dating checks in January.
  • Decide if money owed you now should be paid this year or in January. There may be advantages to moving the revenue into the following year.
  • Archive 2012 email. If your inbox is filled to the brim, here’s your opportunity to reduce your email volume. And compressed email takes up less space. It’s a win-win.

How To Get Your Taxes Done by April 15th

If you have put off taxes, and many people have, there is still time to buckle down and finish them before April 15th. Asking for an extension just prolongs the misery and weighs you down. You know they need to be done so why not just get on with it? Now. There is no more time left to procrastinate.

How to start? Here are 10 easy-to-follow steps:

1) Set up a date to meet with your accountant, if you use one.
2) Schedule time on your calendar to work on your taxes (and only your taxes in this allotted time). Be sure to keep the appointments.
3) If your accountant has given you a worksheet, read it through carefully it so you know exactly what is needed.
4) Pull out all of your papers and divide them into categories. Print the documents that are on the computer or copy them onto a USB or CD for the accountant.
5) Sort the papers again, this time into subcategories. For example, you might begin with a stack labeled clients and gradually whittle it down to a number of individual clients.
6) Write down your questions so you do not forget to ask your accountant or a knowledgeable source.
7) Call for the documents that are missing.
8) Label each stack of documents, using binder clips to separate them. While all of these stacks may not be needed for the accountant or the IRS, it helps to stack them in an organized pile.
9) Put in as much energy and time as needed to finish the job on time. Forego weekends and week nights, if that is what it takes.
10) Make sure the government office signs a receipt and returns it to you. Keep the receipt in your tax file. If the IRS later on says that they never received your taxes, you have the proof that they were sent. This happens more than you may realize.

Now sit back and relax while your friends and colleagues scurry around in panic mode trying to meet their extension dates because they put their taxes off. And you didn’t!