Tax Season is Here!

tax

Tax Filing Season has officially begun! Although it’s a time that almost everyone dreads, there are a few ways that you can be prepared and ready so your tax filing will be a breeze.

Prepare a Tax Folder for Your Important Documents

Whenever a new document arrives in your mailbox, make sure it finds its way securely into that folder as soon as it arrives. By having a designated place for all those pesky W-2 and 1099 forms, they have a lesser chance of getting lost or misplaced. They should be arriving by February 1st.

Determine Any Changes Filing Status

Has anything major happened in the last year? Marriages, divorces, children; they all affect your taxes. Talk with your household to make sure that everything is correct, and you’re not claiming any dependents that you shouldn’t be. Also, confirm all the social security information is correct.

Organize Financial Statements

Having these documents up to date and on hand can make tax preparation and filing much easier. This can aid in tracing the origin of funds and reasons for deposits and payments. Additionally, in the case of an audit, you’ll need receipts and other documentation to substantiate your expenses.

Make a Rough Estimate

Look back on the past year and do some simple calculations to determine whether or not you’re going to owe taxes, and if so, how much. Research what deductions are available to you. When making a rough estimate, it’s best to assume your ultimate tax bill to be high, it’s better to have to pay less than expected than to have an unpleasant surprise. Start saving for that bill now to make sure it will be covered.

Have a Plan

This all doesn’t need to be done in one sitting, but putting aside a little bit of time weekly or monthly will really help reduce the stress of tax season, and make it an easier experience. Plan ahead and set a date to have your taxes prepared filed before the deadline. You’ll be glad you did.

For more detailed explanations and information, check out these resources:

2015 Tax Year in Review

2015 Year-End Tax Planning

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