Tax Season: A Quick Checklist to Get You Started

Preparing for the tax season is something you should do now. The sooner you take the time to get organized and make key decisions, the less likely you are to run into problems when April 15th rolls around. The following checklist will help you to get started. Make this an ongoing process and it will be easier than you think.

• Save and organize all receipts for purchases made, including auto, business, eating out, etc. Organize them by category and then separate those that could be deductions or credits.
• Keep all paycheck stubs to ensure your W2 information is accurate at the end of the year.
• Organize all bills and other expenses related to your business. The only reason to keep utility bills for tax preparation purposes is if you own a home business.
• Locate and organize all investment records, including any statements received throughout the year.
• Keep all asset purchase records separate from bills and ensure you know what tax deductions or credits are available for those types of investments.
• Consider hiring a tax professional now. While you may not be planning to file for a few months, potentially, if you hire a tax professional before the end of the year, this professional could potentially help you to reduce your tax bill.
• Determine if your withholdings are accurate and the best for your financial situation.
• Determine if you can put more money into your savings and retirement accounts to save money on your taxes.
• Put together a tracking system for the rest of this year and next that allows you to track expenses.
• Even if you use a tax professional, do purchase tax software and use it to manage your tax bill throughout the year. This process ensures you have a running estimate of taxes you will need to pay.

When you take these steps now, you will better protect yourself from a shock down the road or a rogue receipt that is incredibly important. It could make a substantial difference in your taxes.