I know that I am one of the few people out there who actually doesn’t mind (and maybe even enjoys?) looking ahead to the next tax season, but I know that I am not the only person who could benefit from thinking about it.
Just think about how every tax season feels, with that persistent feeling of how much of a pain it is to gather all the necessary paperwork. Now I certainly understand that there are a number of forms you will not have for months, but there are some things that you can start gathering now, you know, before you toss some pertinent receipts in your next cleaning binge. I cannot possibly overemphasize the importance of good recordkeeping. Any tax audit can be a hassle, and most likely comes with some fear, but if you kept good records, retained all necessary documentation, and have your return prepared by someone trustworthy (you know someone like that, don’t you?), then you can simply prove that what you reported is correct, and soon forget that it ever felt like an issue.
Tax issues and audits become real frightening, however, when those things aren’t in order. I mean, you can convince yourself (and any tax software) that you handled everything correctly, but you are not going to be able to convince an IRS agent that your interpretation of the rules trumps the government’s view. Furthermore, even if you did have a correct understanding of how the numbers work, they can be thrown out if you cannot prove where your numbers came from. And if your numbers get thrown out, chances are that it will result in a higher tax bill.
So if you know that you do not have everything ordered in a way that will lessen your stress come tax time, this is the time to start doing so. If you have a pile of receipts hanging around in an envelope somewhere, start going through them so you know you have the ones you need. Or if you haven’t been keeping them, and you know you should, well you at least still have about four months to start doing so. And if you’re not sure what to keep, keep anything you have a question about. You will always be happy to have saved too much than to have kept too little.
There is then the idea of what to do with the records you are keeping, though. Maybe you are keeping everything you should, but do not have any sort of bookkeeping system in place, and know that things would be easier if you already had concrete numbers to work with at the end of the year. Well, again, there are four months to set that up, which is more than enough time to get a system in place that will remove that stress.
Finally, many people have had changes in life or changes in income that will alter your tax picture. When that happens, it is worth taking the time to be sure you understand what that will mean to your final numbers so that you can plan for it.
All of this comes back to planning and diligence, two areas that we pride ourselves in specializing in. So if you need any help with these, please don’t hesitate to contact us … while there is still time to make it really meaningful.
Connect to Us ~ Facebook ~ Twitter
To ensure we don't make the folks at the IRS ornery, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.