Why you need to start planning today for next year’s taxes

Tax filing season may be months away, but it’s never too soon to start planning for next year. Not only will this help you stay organized, it will also ensure you have ample time to source, collect, and prepare the documents you’ll need when you sit down with your CPA.

The IRS suggests the following tips to help you prepare for next year’s tax season:

  • Keep records safe. Establish one location where everyone in your household can put tax-related records during the year. Print and keep a copy of your tax return and supporting records together in a safe place. If you ever need your tax return records, it will be easier for you to get them. For example, you may need a copy of your tax return if you apply for a home loan or financial aid for college. This includes Forms W-2, Forms 1099, bank records and records of your family’s health care insurance coverage.
  • Take action when life changes occur. Some life events can change the amount of tax you owe. Examples include a change in marital status or the birth or adoption of a child. When these happen, you may need to change the amount of tax withheld from your pay. To do that, file a new Form W-4, Employee’s Withholding Allowance Certificate, with your employer.  On the other hand, if you’re a business owner or you’re self-employed, and you have questions about how certain life changes might impact your quarterly taxes, be sure to ask your CPA.
  • Start organizing your receipts. If you plan on itemizing your tax return, you’ll want make sure you have proof that backs up each deduction you take. Tossing all of your receipts into a shoebox is one thing—organizing all of your receipts based on categories such as airfare and hotel expenses, health insurance expenses, medication expenses, mileage, child care expenses, and others, is a lot better. Your CPA is bound to thank you.
  • Make your tax appointment sooner than later. Every accountant and CPA you talk to will tell you that tax filing season gets Suffice to say, if you hold off on trying to make your tax filing appointment until after the first of the year, you could run into some scheduling problems.  Be sure to talk to your tax preparer’s office to find out how far in advance you can get something on the books.