Congratulations! You’ve filed and paid your taxes (I mean… hopefully, unless you filed an extension)! First, let’s do a little happy dance! Celebrate that taxing chore being DONE. But don’t relax too much just yet… The preparation you do after the end of a tax season can save you 💰BIG MONEY💰 in the next.
Here are my answers to commonly asked questions about the next steps to take after tax season:
- Can I get rid of tax documents after filing my tax return?
NO! It’s best to save ALL documents related to your most recent tax return filing.. But that doesn’t mean you have to hold onto stacks of paper. As a minimalist myself, I don’t keep much paper around me. Instead, store your tax documents in the cloud. If you work with an accountant, they may have given you your very own online portal where you can upload your files for safe keeping. Please take advantage of this. Things to keep include all documents used to prepare your tax returns including 1099s, W2s, financial statements, etc. Holding onto a copy of any payment receipts made to the IRS or to the state is a smart idea. Also you want to keep a copy of your tax returns.
You have 3 years from the due date of a tax return to file an amendment to claim a refund or make any changes. Therefore, I advise you to hold on to your tax documents for at least 3 years until the tax year is settled. - If I saved more to pay for taxes than I owed, can I use that money now?
Yep. It’s your money! You can take that staycation you’ve been thinking about. You could add that money to your nest egg. You could even use that money to pay more to the IRS in preparation for next year’s quarterly estimated tax payment. The money is yours. Do what you feel! - Do I have to start thinking about next year’s taxes or the next quarterly payment now?
You don’t have to go full throttle, but I suggest using this time to figure out what worked well and what didn’t. Do you need a bookkeeper? Did it take you weeks of stress and frustration to gather all your documents and you refuse to go through that madness again next year? We’re you not really feeling your tax lady and want to explore your options? Did you owe more than you expected to owe?
This could be an opportune time to finally hire the right tax professional to get you right and tight when it comes to having a tax strategy plan that keeps more money in your pocket instead of forking it over to uncle sam.
- I owed way more than I expected, how can I be more prepared next year?
Calculating your estimated taxes and making payments each quarter is essential in planning the right way. Especially if you are balling in your business and profit is growing. There is nothing worse than tax filing deadline sneaking up causing you to pull $40k from your savings to pay it in full in a matter of days. No bueno.
Lucky for you, I’ve created a FREE 1-Minute Quarterly Tax Calculator that you can use quarter after quarter and year after year! Download it here for FREE. You’ll thank me later.
My motto is to organize, plan and coordinate with your tax professional. I want you to be confidently ready for next tax filing season. If you need help, send me a DM and let’s talk.
Cheers to being on top of it!
Chika
P.S. Are you grossing 6 or 7 figures in revenue yet doing all the tax stuff solo? If you’re ready to outsource to a proactive, tax strategy-focused CPA, then look no further. I’ll be opening space to take on a few more clients beginning in May. Apply to work with me here.
