The 2020 tax season officially begins on January 27th. While the last day to file isn’t until April 15th (unless you apply for an extension until October 15th), it never hurts to get started early. The last thing that you want to do is to wait until the first week in April to find all of your papers from 2019 and set up an appointment with a tax preparer. This can lead to a lot of unnecessary stress and frustration.
Tax preparation doesn’t have to be a stressful event. As a CPA, I recommend getting started right now, even if you don’t plan to file your taxes for a few more weeks. Here are 3 things that you can do right now to make this year’s tax season easier.
Schedule an Appointment
Whether you plan on only taking the standard deductions or you have a more complicated situation, tax preparation can be a bit confusing. A professional CPA can be an invaluable asset. If you have investment accounts, need to file taxes for a few different states, or need to itemize your deductions, you need to make sure everything is in order. Someone like me can be there to answer all of your questions and help prepare your taxes correctly.
Even if you don’t plan to file for a few weeks (or even a couple of months) I recommend scheduling a time now. The longer you wait, the more difficult it’ll be to get an appointment.
Gather All Important Papers
Taking the standard deductions only requires your W-2 or 1099. If you’re planning to itemize your deductions, however, you’ll need to have all of your documents in order. Whether you donated to a charity, own your home, sent your child to daycare, or want to deduct your medical expenses, you need to have copies of your receipts.
It could take more time than you think to find all of the necessary documentation for everything you plan to itemize. Over the course of the year, papers may have gotten moved, lost, or accidentally thrown out. The sooner you get started, the more time you have to gather all the necessary documentation. If some of your receipts or documents are missing, you can act quickly to get new copies before it’s too late.
Many people share the same fear of having to pay the IRS after their taxes have been filed. While it’s always a possibility, you can take action now to alleviate the burden should you end up owing.
There are a few ways you can save up a bit of extra money until April 15th. Cut back on extraneous expenses. Dine out less often. Make your morning coffee or smoothie at home before you go to work. While these expenses might not seem like much, they can really add up at the end of the month. You can also consider picking up a temporary side job to help earn some extra money.
By saving now, you can help to alleviate the stress and financial burden of having to pay the IRS in April. Plus, if you end up not owing anything, you have some extra funds to put toward your savings or something fun.
Tax planning doesn’t have to be a difficult or stressful time. If you get started now, you can make the process of filing this year’s taxes much more manageable.