It’s almost that time of year. Tax season is right around the corner, and if you’re like most Americans, you may be feeling the pressure to get your return filed. Filing taxes can be time-consuming and complicated.
Fortunately, there are steps you can take to streamline the process and eliminate the stress. With a little time and planning, you might be able to make this tax season as painless as possible. Below are a few tips to help make filing your returns as seamless and straightforward as possible:
Get all your materials together.
Getting all the documentation you need to fill out your tax forms is half the battle. Having all the paperwork you need readily at hand will go a long way toward reducing the amount of time you spend working on your taxes.
There are a wide variety of documents you might need, depending on your situation. Some of the most common are employer earnings statements, bank account statements, investment account documents and statements related to deductible debt, like your mortgage. You should have all these pulled together by the early part of the year. But if you’re having trouble finding them all, you can call the administrator for the particular account, and they should be able to help you.
Decide whether you need help.
Once you get all your documentation together, you should review it to see if you need help from a professional. The tax code can be difficult to navigate, and if you have a complex tax situation it might be worth your while to seek out someone who can help.
For instance, if you recently went through a divorce or if you own a business, it might be beneficial to get advice from a professional who can guide you through the process. Even if your return is fairly straightforward, you might simply feel uncomfortable completing your return on your own. There’s nothing wrong with asking for help. If you think you might need assistance, you shouldn’t hesitate to find help.
Review your spending.
It’s never a bad idea to look at where you’re spending your money. But during tax time, reviewing your expenses might actually save you money. There are all kinds of expenditures you can deduct from your return. For example, costs such as child care, medical care and home improvements are all things you might be able to claim in order to reduce your tax burden.
Knowing where and how you are spending your money can be extremely helpful and go a long way toward decreasing your taxable income, which can result in a lower tax bill. And if you’re not sure what all you can deduct, you can always talk to a tax professional. They can help you identify which expenses are and aren’t deductible.
Explore additional deduction opportunities.
Just because it’s a new year doesn’t mean you can’t take advantage of deductions for your 2016 return. In fact, some deductions are available right up until April 15. For example, you may still be able to make deductible contributions to a traditional IRA, a health savings account (HSA) or even a 529 plan. Of course, there are limitations that apply to all these accounts, so it’s important to verify your eligibility before moving forward.
Need help organizing your financial picture as you prepare for tax season? Contact your financial professional. They can help you analyze your needs and develop a strategy.
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