Prep We’ve still got plenty of time before the tax season really kicks into full gear. However, that doesn’t mean you can relax and let tax preparation completely slip out of mind. The best thing you can do to set yourself up for success in tax planning season and avoid falling behind is to stay proactive all year long.
Now that Fall has arrived, it is an ideal time to start getting your documents in order so you can hit the ground running with your tax prep when the calendar turns over to the new year.
Here are some tips that will help you avoid falling behind with your tax preparation.
- Review your last year’s taxes: Give yourself a refresher on the issues you faced when filing your taxes this last year. Remind yourself of the deductions you qualified for, any challenges you had to overcome and opportunities for savings you found in your prep work. Looking over the last year’s documentation is a good way to get yourself back in the tax planning mindset and helps remind you of what you need to be thinking about for the coming year’s filing.
- Develop a system that works for you: This is especially important for owners of small businesses who may have to take responsibility for tax prep themselves. Develop a system that works for you all year round. Implement an accurate, usable accounting system, create a system for tracking and organizing receipts and expenses, and find a financial professional you can consult with as needed when you have questions about accounting or tax prep.
- Constantly update your files: If you don’t keep your files updated, you’ll be in for a lot of frustration when tax season arrives and you have go to back through and recalculate your income and expenses. You will make life a whole lot easier on yourself by constantly logging income, expenses and other financial information so you don’t have to worry about catching yourself up months down the line.
- Know your responsibilities: Make sure you have all of the important dates related to your tax prep on the calendar so you know exactly what your responsibilities are and when the relevant dates are for you to track. Set aside money throughout the year if you think you might have to pay in, and be accurate and conservative with your estimates if you’re paying quarterly taxes so you don’t end up with a surprise bill when you file.
Need help getting ready for tax season or tracking your finances throughout the year? Contact us at MCG Solutions today!