Timely Tips for Tackling Taxes
January 25, 2016
Tax time is quickly approaching, you may have started receiving tax information in the mail. Taking action now is the best way to avoid the stress associated with last-minute tax filing. By taking the following steps, you will be breathing a lot easier when tax time comes.
First, collect and consolidate your information. Gather all of your tax-related documents in one place. These generally include receipts for charitable donations, business expenses, property tax records, and medical bills. (NOTE: In order to write off medicals bills on your taxes the amount that YOU paid has to be at LEAST $15,000.) If this step is difficult, make a mental note to organize your tax documents as they accumulate next year.
Next, create a tax information center. You will receive additional tax documents by mail and email in the next few days such as a W-2 from your employer or a notice from your bank showing the mortgage interest you paid. As these documents and emails come in, add them to the collection that you created. This will help you find them easily when you’re ready to file your tax return.
Then, you will want to decide if a retirement or education account contribution is in order. If you have the means, consider contributing to your retirement fund or an education fund. You can contribute to eligible retirement and education accounts before the April 15th tax deadline and get a deduction for the tax year.
Finally, prepare yourself to pay additional taxes at filing time. By getting a jumpstart on your taxes, you should be able to ascertain if you will owe a significant amount of unpaid taxes. If you think this is the case, now is the time to start saving. Start making some adjustments to your budget where you can. Then of course consider adjusting your tax withholding or estimated tax payments (if you are self-employed) so that you can correct the situation for next year.
Being prepared is one of the best tax strategies you can have. While you may think that tax season is months away it will come around quickly. By taking these simple steps, you’ll be a lot less stressed when the April tax dead line is here. Also if you have any questions please call Compton Accounting and we will help you with all of your tax and accounting needs 309-484-8888.