We all dread tax season each year, as a year's worth of procrastination and lost records finally catches up to us. If you just finished filing your 2014 taxes, you probably don't want to think about taxes until this time next year! But if you take a few proactive steps now, you won't feel so stressed out next spring.
Set up an account on IRS.gov. If you've ever had a difficult time locating old tax records, you know that the IRS system can be slow and difficult to navigate. Don't wait until the busy tax season to set up an online account, when the website may be subject to freezing and crashing. Do it now, and you may thank yourself later.
Check in with your accountant. Your accountant is available to you throughout the year, not just in April! Don't save all of your tax questions for the last minute and then find yourself in a bind the evening of April 14. Take note of your tax questions throughout the year, and give your accountant a call any time you have concerns you need to discuss.
Talk to your financial planner, too. Are you taking maximum advantage of all retirement savings opportunities? Considering some of these options carry pretty serious tax advantages, you should investigate them throughout the year. Don't wait until tax time to stash money for retirement.
Establish a better record-keeping system. If you wait until April to locate old receipts and account statements, it's no wonder you feel pressured. Create a better system now, and commit yourself to using it throughout the year. If you love technology, try scanning and uploading everything to a cloud storage system. If you prefer the old-fashioned method, there is nothing wrong with a filing cabinet or fireproof box.
Keep track of your deductions. In particular, charitable donations can cause a headache at tax time, as you try to remember every contribution and sift through a mountain of receipts. Create a budget for charitable giving now, and decide upon a schedule for writing those checks. Then simply slip a copy of each check into your filing system, and you're done!
Pay early. If you're shocked by your tax bill each spring, pay more of your taxes throughout the year. Adjust your payroll withholding upward. Or, if you're self-employed, establish a quarterly tax payment system. Talk to your accountant about the amount you should be paying throughout the year in order to avoid a large bill next April.
Carstens Financial Group focuses on providing comprehensive asset management, estate planning and life insurance solutions. Allow us to help you secure your financial future.