April 15 is coming soon, and with it, the American ritual of preparing and filing our taxes. Preparing your taxes this year looks to be a little more difficult than previous years, due to the substantial changes to our tax code. As always, there are a couple of things you can do to make tax time easier.
Hire a Professional
If you can, we highly recommend consulting a tax-preparation professional. The tax code is complicated, and hiring someone who knows how it works can make a big difference in how much you end up paying. If you do hire a professional, you should book your appointment early. Many tax preparers are extremely busy as we approach the filing date, especially this year.
Whether you are doing your taxes yourself or gathering information for a professional to prepare them for you, with so many details it’s easy to overlook important information. That’s why we’ve put together some Tax Time Tips, including a checklist you can use to make sure you’ve gathered the information you’re likely to need.
Download a Checklist
Getting your personal information organized and keeping it that way can save you time. It is also a great tool to help you manage your household budget and plan for important needs, from medical or financial emergencies to planning for retirement. The key is to set it up so you can find the information you need quickly and easily. If you’re unsure of what kinds of information you might need, or how to get organized, our Tax Time Checklist gives you a great place to start.
No matter what time of year it is, now is the best time to start. The sooner you set up a system to organize your information, the easier it will be to find what you need in the future.
Keep It Going
Trying to sort through mountains of paper at the last minute to find what you need is stressful and makes a tough job harder. Set up a home filing system and get in the habit of using it regularly. Make organization a habit. When you finish paying your bills, file them in the appropriate folder. Paying bills online can be easy and convenient, but it’s a good idea to print out a copy of your bill or statement and file it.
When in Doubt, Print It Out
When you begin to prepare your taxes it’s not always perfectly clear what information you might need. If you’re not sure about a specific expense or item, print it out. Your tax preparer can help you determine if the information is useful. If you are preparing your taxes yourself, having hard copies makes it easier to sort information into categories. It is also a good idea to print out your bank and credit card statements each month and file them. This makes it easier for you to review your expenses at tax time and may be useful in other circumstances as well.
Save It for Next Year
You’ll also want to print out your completed return when you are finished for reference next year. This can help you, or your tax-preparation professional, keep track of expenses claimed or other important items that might otherwise get overlooked.
For more in-depth information and help in getting organized, you may want to read through our Tax Time Checklist.
It is a good idea to rely on official government sites for your information. Official sites such as federal and state websites can provide you with valuable information. The IRS’s Publication 17 is a good example. Remember, there is a lot of free tax information on the web, much of which is outdated, inaccurate, or just plain wrong.
The extra effort of getting organized will help make this year’s tax preparation easier, and if you keep up the habit, will make next year even easier. Good luck!
Hammermill’s Tax Time Tips were created to give you some general tips on how to gather and organize your tax-related information; this is not tax, investment, legal or professional advice. For best results, we strongly recommend you seek the assistance of a qualified tax preparation professional.
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