You’ve filed and paid your taxes… now what? First let’s do a little happy dance! After such a tumultuous tax filing season with all the IRS changes and updates, I just want to get up and do the stanky leg dance with glee. But, I digress, because work ain’t over yet. Here are my answers to commonly asked questions about next steps after tax season.
Can I get rid of receipts and old documents?
Let’s tackle the big one first. You need to save all documents related to your filing that were just turned into the IRS. Keep this in a folder by itself along with the receipt of payment to the IRS (copy of the check, bank statement of the withdrawal etc.). Tax documents need to be kept for seven years. As for your many receipts for deductions etc. you still need to keep these hard or digital copies for the next year. This ensures you have the documentation until taxes are “settled”.
If I saved more to pay for taxes than I owed, can I use that money now?
Yep. Give yourself a bonus, pay more to the IRS to prepare for the next payment (hello quarterly taxes!) or add it to your nest egg.
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? Do you need to store receipts and files in a different place or organize them differently? Should you set aside an hour a week to prep documents or receipts? Did you owe more than you expected and were shocked? This could be a great time to finally hire a tax professional to provide quarterly tax planning sessions and help you set up quarterly payments.
When will I receive my refund if I am owed one?
You can expect your refunds based on when you filed. The earlier you filed, the earlier you will get your payment. As you can imagine, millions of people wait till the last minute and flood the IRS offices & online systems. Refunds started February 26th and will be delivered no later than the end of August.
I hated feeling reactive to the whole tax filing process. Plus I owed wayyy more than I thought I would. What can I do to feel more empowered and ready come next tax season?
First of all congratulations! It sounds like your business profits grew from the year prior. I doubt this was a fluke. As revenue climbs, you want to make sure you have a detailed Tax Plan in place that you can look to as a guide to implement certain strategies to ensure that all of your hard earned money isn’t going straight to Uncle Sam’s pockets. If your business is making at least 6 figures, it’s time to talk. Learn more about my Tax Strategy Planning Sessions here.
My motto is to organize, consult with a tax professional and plan. Ultimately these three actions will save you money, energy and time in the long run.