It’s that time of year again. April will be here before you know it. While April usually brings nicer weather, it also brings April 15, the standard deadline for filing your taxes. If you’re like many Americans, the task of filing your return could cause you to feel stress and anxiety, especially if you have a complicated financial picture.
The good news is that tax time doesn’t have to be stressful. With a little planning and preparation, you can eliminate some of the biggest complications and turn tax time into a seamless process. Below are a few tips to help you survive this tax season:
Gather and organize your documentation.
One of the biggest mistakes people often make with their taxes is that they don’t gather all their necessary documents until the last minute. As a result, they may forget about a 1099 or possibly a debt expense that’s deductible.
If you haven’t done so already, make a list of all your income sources and financial assets. Also make a list of deductible debt accounts, like mortgages. Then gather all the necessary documents related to those accounts and organize them in a clear manner, so you can easily reference them as you prepare your return.
You’ve probably already received 1099s and other tax documents related to employment and to financial accounts. If you’re missing documentation, contact that account’s administrator so you can get the information by the deadline.
Review your spending.
It’s always a wise idea to review your spending. Doing so allows you to see how you’re spending your money and whether you’re staying within your budget. It’s especially helpful to review your spending at tax time. It’s possible you’ve made purchases that are tax-deductible.
For example, you may qualify to deduct some of your spending on child care or medical expenses. You may be able to deduct costs for improvements you made to your home, especially if the improvements boosted energy efficiency.
A tax professional can help you identify which expenses are deductible and which aren’t. However, you can get started on the process by reviewing your spending and identifying those costs that may be eligible.
Consider additional deduction opportunities.
Just because 2016 is over doesn’t mean you can’t still take advantage of deduction opportunities for your 2016 return. There are some potential deductions you can use all the way up until the April 15 filing deadline. Such opportunities may include contributions to traditional IRAs, 529 plans and even health savings accounts (HSAs).
Get help if you need it.
Even after taking these steps, you still may feel overwhelmed by the filing process. Or you may have a complicated tax situation. For example, you may own a business, have a wide range of investments or have undergone a major life change, like a divorce. In any of those instances, your taxes may simply have become too complex for you to adequately prepare yourself.
Instead, consider working with a tax professional, who can help you identify opportunities and risks in your return and take action. Don’t attempt to go it alone if you don’t feel confident doing so.
Ready to organize your financial affairs so you’re ready for tax season? Let’s talk about it. Contact us today at Carstens Financial Group. We can help you examine your entire financial picture. Let’s connect soon and start the conversation.
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