We know that filing taxes isn’t exactly a picnic for anyone. So, it’s natural that you don’t want to think about dealing with your taxes until it’s absolutely necessary. However, by starting to prepare now, and planning ahead for your 2019 tax return, you can make the filing process much less stressful for yourself. And, you may even be able to reduce your tax liability. Here are just 5 things you can do to make filing your 2019 return easier. Schedule an appointment with a Provo tax planning service to learn more.
Keep Your Documents Organized
It is far easier to start organizing your tax-related documents now than it is to try to dig up all the necessary paperwork once tax season starts. True, basically every document you can think of is digital now, but that doesn’t make logging into your financial accounts and downloading every document again any easier.
You’ll save yourself a lot of stress and a lot of time if you set up a folder for all tax-related documents now, and keep those files organized throughout the year. This can be a physical folder in your desk or filing cabinet at home, or it can be a file on your computer. Just be sure that you put every document related to your taxes into the folder as soon as you can. This may include mortgage interest statements, documentation of charitable donations, spreadsheets of deductible miles driven, business expense receipts, and more.
Then, when it’s time to file, you can simply bring this folder to your accountant, and not waste time trying to find all the documents you need.
Adjust Your Withholdings
It’s a good idea to review your withholdings on your paycheck at least once a year, but if you didn’t do it in 2018, it’s especially important that you do so this year. Many taxpayers experienced some sticker shock when they received their 2018 tax bills. When the TCJA went into effect last year, most workers had less tax withheld from their paychecks. However, this meant paying back all those taxes when filing their 2018 tax returns.
If you want to avoid a similar situation next tax season, use the IRS’s withholding calculator to figure out exactly how many exemptions you should be taking on your paychecks. Then, request a new Form W-4 from your HR department at work, and update your withholdings accordingly. It only takes a few minutes, but it can make tax season a lot more bearable for you.
Schedule Your Retirement Contributions
Contributing to your retirement accounts is a great way to reduce your taxable income. Many people make large deposits to their 401ks and IRAs at the end of the tax year. Of course, this is a viable option for many. However, if you usually find it hard to scrape together the funding for such large lump sums, it may be beneficial to schedule your retirement contributions and make them throughout the course of the year.
By making regular, smaller deposits, you can still reap the tax benefits of your retirement contributions, but you don’t have to worry about scrambling to find the funding for your accounts. In fact, you may even find yourself contributing more throughout the course of the year, which would mean a larger tax deduction on your return.
Educate Yourself on Deductions and Credits
There are numerous tax credits and deductions available, and odds are, you may qualify for one or more that you’re not even aware of. The last thing you want is to miss out on an eligible deduction due to a simple lack of knowledge. Take a little time this year to educate yourself on common tax deductions and credits—especially those that changed with the TCJA—so that you’ll be more likely to get every tax cut you qualify for.
Even when working with a tax preparer, having this knowledge can benefit you immensely. Many tax deductions and credits are based on certain circumstances and unique situations. If your CPA is unaware of these pertinent details in your life, they won’t know to include those deductions or credits. However, if you make a point to educate yourself about qualifying deductions and credits, you can ensure your CPA has all the right information to help you secure those benefits on your tax return.
Meet with a Tax Planner
CPAs can help you with your taxes, even when it’s not tax season. Throughout the rest of the year, we offer a Provo tax planning service that allows you to sit down with an accountant and review your tax situation in great detail. In these meetings, we can help you to figure out what steps you can take throughout the year to potentially reduce your tax liability, and to make filing your 2019 return simpler and easier.
If you want to make the 2020 tax season less stressful for you, and potentially reduce your 2019 tax liability, contact us to learn more about our Provo tax planning service.