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How to Get a Jump Start on Taxes

Taxes are one of those things people tend to put off for as long as possible. After all, no one really likes doing them. But procrastination has consequences. For example, it increases your anxiety and leaves you more stressed. It consumes more time.

And, if you put taxes off for too long, you may end up missing the tax deadline, leaving you to face additional fees.

So instead, why not do something crazy and get a jump-start on your taxes? No, you can’t file them right now.  The earliest you can do that is the end of January, 2018. In the meantime, there are some steps you can take so that when tax season begins, you’ll practically be finished.

Don’t you feel less stressed already?

Warning: Some People Just Have to Wait

Are you a single, regularly employed person who rents their place of living and doesn’t qualify for any special deductions.  If that’s you, your taxes aren’t exactly stressful in the first place, and you’re probably eager to get an inevitable refund.

Just wait patiently for your tax forms to come at the start of the new year, and you’ll be all set.

Even if you’re married, your taxes might be as simple as gathering a W-2 or two, along with any loan interest information, and filling out some forms.

The people who can benefit the most from starting taxes early are independent contractors and business owners. If that’s you, here are some simple tips.

Make Sure You Know Where Last Year’s Taxes Are

It’s always good to have a copy of last year’s tax records. Actually, since the IRS can go back as far as 6 years when auditing a person, it doesn’t hurt to keep six years’ worth of records on hand. But when it comes to this year’s taxes, it’s last year’s records that are most important.

You might not end up needing them, but having them can speed up the process and reduce the risk of errors. So make sure you know where they are. If you can’t find them, you can get a copy through the IRS.

Start Listing and Categorizing Expenses

If you run a business or work independently, you’re probably spending some amount of money on business related items. You should already be keeping a record of these expenses so that you can deduct them accordingly at the end of the yea, but if you’re not, now is the time to start.

Take a moment to look through your purchases, general expenses, and any other cost relating to your business, and write it down. Include what the expense is, how much it cost, and when you bought it. It certainly doesn’t hurt to have a receipt or proof of purchase as well.

Keep things organized. You don’t need an elaborate system. Just one that’s easy to read and update.

Consider Future Purchases

Let’s say you’re planning on making a big business purchase or two in the near future. If you’re looking to increase your deductions for this tax season, it could be a good idea to make the purchase before the end of the year so you can write it off now.

However, if you’re afraid you’re going to be owing a significant amount on your taxes, it might be wisest to wait until after you file your taxes so you know where you stand financially.

Keep Up to Date on Estimated Quarterly Taxes

Unfortunately, working independently doesn’t mean you get to avoid paying income taxes. In fact, you should be paying them throughout the year via estimated quarterly taxes. If you’re behind, now would be a good time to catch up, as you can be charged fines by paying late.

You can learn more about estimated quarterly taxes here.

Meet with a Tax Professional

If you really want to make sure you’re on the right track with taxes, schedule a meeting with a tax professional. They can provide guidance, suggestions, and correction. A simple consultation could reveal some things that will end up making your life a lot easier down the road.

So what are you waiting for?

For tax preparation and consultation in Springfield, Ohio, contact the team at LWS. We’ll help take some of the anxiety out of your tax season.

Posted by admin | in Business Tax, Individual Tax