For most people, taxes are something that we want to spend as little time thinking about as possible. We wait until it is absolutely necessary before we take any action and then try to finish them up as quickly as possible. Once taxes are done, the last thing we want to do is spend any more time worrying or stressing about them until next year rolls around.
There are some things we can do throughout the year, however, that will make tax time much easier to deal with when tax season approaches again. By being slightly proactive, we can save ourselves some stress and aggravation down the road. Below we share 4 things you can do this year to be better prepared for next year’s taxes.
1. Take a Look at Last Year’s Taxes
Consider what you learned from last year’s taxes that can help you next year. What things caught you off guard? Where were you pleasantly surprised? What things can you do as you go along this year that will make a difference? Once our taxes are filed for the year, we tend to forget the details that led to missed opportunities. Be proactive for next year by making a note on what you missed this year.
2. Get Organized
Of upmost importance when it comes to filing taxes is staying organized throughout the year. This means finding an effective method to hang onto important documents and receipts that pile up over the year. Keeping track of expenditures, invoices and paystubs may seem tedious now, but can be very beneficial down the road. By getting organized now, you will find that staying on top of important documents throughout the year will not be as difficult.
3. Think About Deductions
When it comes to taxes, deductions should be a high priority. There are so many different deductions available for taxpayers if we are paying attention. Many times, we miss out on these deductions because we do not plan ahead. Now is a great time to think about deductions you could claim next year and then plan out what needs to happen in order to make them happen. Charitable contributions, for example, are a great tax deduction that many people miss because they are not thinking about it at the right time. Do not miss your opportunity to claim those deductions.
4. Plan For Investments
As you look to the future, be sure to take into account how taxes are involved in your investment strategies. Contributions to a retirement plan like a 401k can be tax deferred and help you manage your money more strategically.
These are just a few ideas on how to strategically plan for taxes next year. We invite you to learn more about what you can do by giving Hacker Accounting a call today at 602-375-5251. Allow us to share our experience and knowledge with you.