Taxes are, unfortunately, an inescapable fact of life. And because the tax filing process is often stressful and confusing, many of us wait as long as possible to start it. If you’re running late this year, don’t panic. You aren’t alone. A recent survey found 31% of Americans say they “procrastinate” when it comes to filing their taxes.
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With banks sending out tax documents later and later every year, it’s crucial to get a head start on tax prep whenever possible. This is especially important for women who juggle multiple roles and responsibilities. Fortunately, there are strategies you can adopt to make Tax Day prep easier and less stressful, including having what’s known as a “tax checklist.”
And while it can be daunting to complete your taxes, you can make it more seamless by taking the proper steps. With Tax Day coming up on April 15, here are five strategies to bookmark for your last-minute tax preparation.
Keep Paper & Digital Documents For Taxes
It’s a good idea to keep both hard and electronic files of documents needed for filing taxes. If you get your return prepared by a Certified Public Accountant (CPA), you may even have the option to upload your tax information into a secure digital portal. By scanning and uploading your income tax documents, you increase efficiency: Everything exists in a single location, in an accessible format, in an easily searchable database. You have a digital copy of your documents in case you misplace the physical ones, and your CPA can more easily access necessary tax information.
File Your Taxes As Soon As Possible
You may have missed the chance to do this last year, but there are several advantages to filing your taxes early. For one, you’ll receive your tax refunds faster. By filing early, your chances of avoiding scammers who attempt to file a fake return with your Social Security number also increase significantly. Because each Social Security number can be associated with only one tax return every year, early filers deny scammers the opportunity to use theirs.
Tax season is also a great time to contribute to your retirement accounts. You can make IRA and Roth IRA contributions that count toward the previous year, for example, until the tax deadline. If you’re self-employed and have a SEP or SIMPLE plan, you often have to wait until your returns have been filed to see how much you can give to your retirement account, depending on how your income shook out for the year.
While you’re at it, it could also be a good time to “spring clean” your general finances.
Set Calendar Reminders
Set calendar reminders for things like estimated tax payments, charitable contributions, and retirement account contributions. While it’s not uncommon to wait until the last days of the year to make contributions, custodians are often too backlogged and can’t always ensure that those gifts will be associated with the desired calendar year. To prevent this, set calendar reminders to make those charitable gifts. If you must pay estimated tax payments, set reminders a couple of weeks in advance of the due dates.
Use A Checklist For Tax Preparation
Before submitting everything to your tax preparer, use a tax checklist. This will minimize the back-and-forth between you and your accountant and keep everything organized on your end. While it might seem like an optional step, this list can give more structure to the tax-filing process, which should result in a less stressful experience — both for you and your CPA. It can also save you money. Many CPAs charge by the hour so the less back-and-forth, the lower the invoice for tax preparation.
Simple Tax Software Can Be Your Friend
At this point, there are several tax preparation and filing software programs on the market. These can be very useful if you’re filing taxes on your own. Some of them are even free to use, depending on your needs and income. Before you decide on a program, do research to ensure the one you pick is user-friendly and capable of accommodating your tax situation.
Preparing and filing taxes can be a daunting task, but it doesn’t have to be. By using the correct tools and strategies, you can streamline the process and reduce the stress of tax season. These tax return tips will help you prepare for this year and the years to come. Don’t let tax season stress you out — take control of your finances and tackle your taxes head-on!
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