How to Prepare for Next Year's Taxes Right Now

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April’s tax deadline has come and gone and you met the filing deadlines (nice job!), but before you put all that behind you, right now is the perfect time to make a plan about how you are going to start preparing for next year. Don’t wait to be overwhelmed at the last minute and don’t wait for LM Cohen & Co to contact you next filing season to remind you about your taxes.By taking these steps throughout the year you will be able to ease your tax filing stresses next year.

 

Here are some tips to consider:

 

Tip #1: SAVE! Throughout the year when you receive a document that may or may not be important to us, save it! Better to save it now so later on you don’t have to go and find it or possibly get a new copy. Some support items that taxpayers should keep throughout the year are: bills, credit card and other receipts, invoices, mileage logs, canceled checks or any other proof of payments, as well as records to support deductions or credits claimed on a tax return. Also, save your current and your prior year’s tax returns and the supporting documents. It is important to keep your tax returns for at least seven years.

 

Tip #2: Adopt a new system. It is smart for you to adopt of new system to save your information in a secure place and an easy place for you to retrieve it later. Whether that is keeping everything in a box under your bed or scanning everything into a folder in your computer, it is important you figure out the best way to save so you do not have to scramble when we ask you for a copy of a tax document next year. A well-organized recordkeeping system makes finding information much easier. Many taxpayers look into purchasing online accounting software to track expenses and income (to reduce time later). Mobile apps are also available on your smartphone or tablet that can scan and sort documents, receipts or other tax information. Using a digital archive for managing can make next year’s tax season a little less stressful. According to the IRS, the average taxpayer takes about 13 hours to complete their federal income tax return. To reduce the amount of time you spend on your taxes this year, you must get organized.

 

Tip #3: Review your return with your tax preparer or financial adviser. Most tax preparers take a well-deserved break after April 15th and for many of them their next crunch time isn’t until later in the year. During this slower period, schedule an appointment with your LM Cohen professional to review your return and discuss ways to minimize taxes next year. They may be able to suggest strategies to reduce your tax burden for the coming year. Worst case, you can confirm that you are doing everything reasonably possible to ensure that you pay only what you owe! 

 

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