No matter how you slice it, the truth of the matter is it’s almost that time of year again. Like a lot of you, I’m excited, and even though all of us know the date, there’s always some last minute shoppers.
No, I’m not talking about Christmas, I’m, talking about tax season!
Every year, we get bombarded by folks that have put things off until late March, so I figured I’d start a little early this year. Besides, you’ve already gotten all your holiday shopping done, right?
In reality, there are some things you can do – even this early – to get ready for the tax season. After all, W2s will be coming out at the end of next month, so why not be ready to file once you’ve gotten them?
For starters, be organized. At the same time, if you are one of the last-minute folks, it will pay you – and save you considerably – if you do a few things before you make that wild-eyed last-minute run to our office…
I find the most frustrating part of filing taxes is trying to corral all the information me and my team need. Once we’ve got it all assembled, the process is always fairly quick. What sorts of things do we need to know? Sure, this is usually stuff that’s “easy” and undoubtedly in the paperwork we’ve already been using, but every year, a few poor souls struggle to make sure all this information is here to use.
- Social security number(s)
- Tax ID Number for all corporate entities
- Any applicable W2s or 1099s for other income (1099-INT, 1099-DIV, 1099-K)
- Last year’s tax return
- Other income (self employment income not on a 1099)
- Retirement account or IRA contributions
- Student loan interest statements
- Education costs (form 1098-T)
- Home mortgage interest expense
- Charitable donations (remember, these END on December 31st!)
- Checking account information for refund or payment
- Health Insurance information – including a 1095-A if you bought in the Marketplace
All this assumes that you have the current and correct financial statements and bookkeeping documentation available. As much as I hate to say it, the longer you struggle to put the basics in the above list together, the higher the odds you’ll simply have to file an extension until we can all wrap our arms around your finances … and that pushes things out until October!
P.S. There’s one thing that I always try to stress to clients this time of the year. If filing taxes frustrates you, take the time this Spring to set yourself up for success in the next year. Create the bookkeeping and financial systems and documentation that make it easier to file and save you money on the volume of time me and my team spend getting these things straightened out.