Are you already dreading April 15th? (Or do you always file for an extension and therefore dread some other day in the future?)
If tax season catches you unaware or unprepared each year, you can take a few simple actions now to make next year’s tax season the easiest one you’ve ever experienced. As a matter of fact, in just 20 minutes, you can change the course of your spring and next year’s taxes – the following tips will jump start your taxes in less than the time it takes you to watch your favorite sitcom.
Minutes 1-10: Organize Your Receipts and Paperwork
You don’t have to analyze it or even worry about it now, but creating a receipts organizer or another system for managing your paperwork will save you hours and hours as April 15 approaches. Pull together your bank statements, income statements, financial paperwork and receipts; you can do this online or in a folder. If you want to get fancy, organize it by income and expenses. This step typically takes the most time when it comes to tax preparation, so getting organized now is one of the smartest things you can do.
Minutes 11-17: Plan Your Deductions
If you tend to leave your taxes until the last minute, then you probably miss out on several potential deductions. Determine any charitable giving for the remainder of the year as well as contributions to any relevant retirement accounts, tax benefits for education, home office deductions and so on. If you set a schedule for various payments and donations and write it down in your planner or tablet, you will be more likely to follow through and have these key deductions come tax time. This step will also make you feel better when you realize you have several deductions coming your way.
Minutes 18-20: Call a Professional Tax Planner or Accountant
You’ve already conceded that you don’t really like dealing with your taxes, so hiring a professional is likely your best bet. If you don’t have a name in mind, ask a friend or family member for a reliable recommendation. While you will still need to provide organized information, this step will likely save you both time and money. If you want to give tax preparation another shot, you can try an online program; there are a variety of options that make the process relatively simple, unless your finances are especially complicated.
In 20 minutes, you can get organized and get started, so that April 15 is simply the middle of the month, rather than a day you dread. A few minutes over the course of the year can save you hours when it comes to managing your taxes.