It’s that time of year… TAX TIME! Doesn’t matter if you love it or hate it, you have to deal with it. If you don’t you’ll be in deep. Taxes are enough to make most people anxious. But fear not, a little advance work will save you time, money, and sanity.
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Here are 7 simple steps to take before you prepare your taxes…
- Choose a tax preparer and schedule an appointment
Hiring a professional will take a ton of stress off of you. You’ll do this like you do for most other services, reach out to friends and advisors for recommendations! Make sure the preparer you choose has a preparer tax identification number (PTIN) to ensure they are actually equipped to prepare your tax returns.
Get yourself on the preparer’s calendar so you don’t miss your filing deadline. Remember that tax season is busy for everyone and most preparers’ calendars will fill up.
- Gather your documents
By the end of January you will have received all the documents you need from employers to file your taxes. This includes W-2’s and Form 1099s. Keep these in a safe place and have them ready to go.
- Organize your receipts
What receipts you’ll need will depend on whether you itemize your deductions or claim the standard deduction. You’ll choose whichever provides the bigger write-off. Some important receipts to look out for are receipts for medical costs not covered by insurance, property taxes, investment-related expenses.
The important thing here is the better organized you are, the less time your tax preparer will have to spend… Which saves you money!
- Estimate your payment
I gotchu on this one! You can calculate your quarterly tax payments for free with my calculator! The Quarterly Tax Calculator will take the guessing out of your next tax season. Download it for FREE here now.
- List your personal info
In addition to your own Social Security number, you’ll need the SSN of your spouse and each dependent you claim. Note addresses of any vacation homes or rental properties and the details of that property.
- Decide if you need to file an extension
If you need more time to complete these tasks, that’s ok! But you need to request an extension. You’ll still need to estimate how much tax you owe and pay that to avoid penalties.
- Find a copy of last year’s return
This is why I highly recommend using the same preparer, they can keep this type of information easily accessible for you year after year. If you are using a new preparer, your return from last year can provide them much-needed insight. So make sure to provide a copy to your new tax preparer!
These seven simple steps will save you and your tax preparer time and energy. You have enough on your plate during the end of the year and the beginning of the new year. Your valuable brain space should not be wasted stressing over taxes!