How to Start Preparing for Taxes Now
They say there are two things certain in life: death and taxes. And if you know what’s coming, why not prepare for it? Although you may be dreading the inevitable return of tax season, there are some things you can do now in order to make filing taxes easier when the time comes.
In this post, we’ll be discussing 3 tips to help you get ready for tax season in no time.
1. Mark your calendar
There’s nothing more frustrating or nerve-racking than realizing you forgot to file your taxes on time. Failing to meet the deadline could mean late fees and other more serious consequences later on down the road if you forget to pay or file altogether.
That’s why our first step is to mark your calendar. The deadline for filing your taxes this year is April 15th, 2020.
Once you’ve marked a few reminders on your wall calendar and/or digital calendar, think about how you plan to file your taxes. Will you file your taxes yourself online? Meet with a tax prep professional? Deciding this in advance will help you beat the rush of fellow taxpayers scrambling to meet the deadline—not to mention, help you maintain peace of mind.
2. Check your withholding
When you first started your job, your employer should have given you some tax paperwork to fill out, most commonly, Form W-4. This form allows you to tell your employer how much money you want them to withhold on your paychecks to account for your federal and state taxes. The way the IRS and your employer determine how much money to withhold is by looking at how many withholding allowances you claim on your W-4. You can claim between 0 and 4; the fewer allowances you claim, the more money that’s withheld.
If you claim too many allowances (so less money is withheld on each paycheck), you are more likely to owe taxes when you get your year-end tax return. If you claim very few allowances, you are more likely to end up getting a tax refund when you file your annual tax return.
To help you prepare to file your taxes—and budget if you anticipate owing money—you should verify how much money your employer is currently withholding from your paychecks. If you need to adjust the amount, you can ask your employer to complete a new W-4. This step will help you know what to expect when you’re ready to file in April.
3. Gather your paperwork
Whether you’re filing online or in-person with the help of a tax preparation specialist, you’ll need to have your tax information at the ready. Gather these documents together and place them in a file a week or two in advance of when you intend to file. To go the extra mile, make digital copies of each to have as your backup!
To file your taxes, you will need:
- Your social security card or tax ID
- A valid driver’s license, an identification card, and/or a valid passport
- Last year’s tax return
- Your W-2 or 1099
- Any receipts or other relevant paperwork if you plan to itemize your deductions
- Information for any dependents you are claiming
Filing taxes often sounds more dreadful than it actually is. Follow these tips to help you get a headstart on this year’s tax return! Have additional questions regarding tax preparation? Let the Community Tax team help! Contact us for a free tax consultation today.