As 2018 draws to a close, everyone is preparing for the challenges, both known and unknown, that the new year will bring. One thing that can be counted upon, as surely as the sunrise, is the fact that income taxes will need to be filed. It’s a great idea to prepare in the months leading up to the filing of your taxes to ensure that the process goes as smoothly as possible.
“Just due to volume alone, if citizens can start prepping earlier in general, that would be really beneficial,” says Ryan Nguyen of Nguyen CPA Denver. Nguyen goes on to clarify that it doesn’t matter whether you live in a big city or a small town—CPAs will be busy all season long helping people deal with their taxes, and you’ll do yourself a favor by having as much as you can done when you arrive.
How can you prepare for the big day? Here are a few suggestions.
Save All Your Tax Forms
Sometime soon, tax forms will start arriving in your mailbox. These forms will contain reports of income you’ve earned throughout the year. You’ll get records of loans you’ve made payments on, your health insurance coverage throughout the year, and numerous other financial details, depending on your personal circumstances. Determine where you’re going to keep these papers in advance because you don’t want any of them to go missing. When each one arrives, carefully file it away so as not to lose it.
Determine Your Filing Status
For some, determining filing status will be easy and straightforward. If you are never married and living alone, with no dependents, your filing status is single. For others, however, there are options available. Do you want to file jointly with your spouse or as individuals? Do you qualify to file as Head of Household? Of course, a CPA can help you make this decision, but doing the research in advance and learning what status will benefit you most can only help the process.
Gather Last Year’s Paperwork
Your tax paperwork is going to ask you some questions about your return from last year. If you’re working with the same CPA, there’s a chance they’ll be able to look up the information for you, but having it on hand is advisable. The easier it is to find the information you need, the more quickly you’ll be in and out and finished with your taxes for another year.
Note Your Deductions
If you’re going to itemize your deductions, you’ll need to make a careful and accurate record of what they are. This isn’t something to do haphazardly and on the spot. Gather receipts for those expenses you believe to be deductible. This includes business expenses if you’re self-employed, property taxes, charitable donations, childcare expenses, interest on student loans, retirement contributions, and many other items.
By preparing beforehand, you will be able to make your income tax filing experience relatively painless and easy.