Tax season preparation: 9 ways to get a jump start on your taxes

Tax season is fast approaching, with everyone’s employer due to send their W-2s by the end of January. Now is the time to start getting ready to file your taxes.

It’s helpful to be mindful of your taxes throughout the year, which will help you stay organized and avoid scrambling every year when tax season rolls around. Here are 10 ways to get a jump start on your taxes now, or anytime of year:

1. Figure out which forms you’ll need

Since everyone’s financial situation is different, there are many different tax forms that suit these different situations. If you’re unsure which tax form to use, visit the IRS’s website or consult a professional.

2. Keep all receipts in the same place

If you’re someone who itemizes deductions instead of standard ones, you already know how important it is to store all of your receipts together in the same place. If you lose any, it could cost you. Sort and store them throughout the year to avoid a last-minute scramble.

3. Store all tax returns together

Since we often have to reference the previous year’s return when preparing the current one, it’s a good idea to make sure you store them all in the same place, whether it’s a desk drawer, filing cabinet, or even a shoebox under your bed.  If you’re already a Timberlake & Associates client, we have electronic versions of your last seven years of returns.

4. Consider filing an extension

It might seem counter-intuitive to suggest an extension in a list about being prepared. However, if you file an extension and wait until later in the year, accountants will be less busy and you’ll end up filing in less time. This is also helpful for anyone experiencing any kind of stressful life event, such as those who were involved in any of the hurricanes in Texas, Florida, or Puerto Rico this year.

5. Review/revise your W-4

If you’ve experienced any life changes from the previous year (adding or losing any family members), ask your employer if you can review your W-4. M&M Financial / Timberlake recommends doing this every year.

6. Save your money

Unless you fill out the 1040EZ form and mail it in yourself, it’s going to cost you money to file your taxes. Some people are happy to pay this to ensure that they’ve done it correctly.  There’s something to be said for the piece of mind of having your taxes prepared by a professional who’s always up to date on the most recent tax law. You may also still owe taxes in addition to what you’ve already paid in. If you’ve saved for it, it shouldn’t be a problem.   Professional prepares also know all the best deductions, so paying a professional could actually save you money.

7. Check your deductions

If you’ve had any major life events this year (bought a house, gotten married, had a child, etc.) you may be entitled to some sizable deductions. It’s a good idea to research all possible deductions to avoid overpaying your taxes.  Have questions?  Call us.  We’re happy to help.

8. Choose between itemized and standard deductions

Depending on what type of work you do and your financial situation, you may need to do itemized deductions, where you get credits for everything you’ve spent, rather than taking the standard deduction as dictated by your filing status. Timberlake & Associates is always here to help decide which is best for your situation.

9. Track all charitable donations

Charitable donations are tax-deductible, so if you have any monthly or one-off donations, make sure to keep track so that you can deduct these expenses from your taxes.