Saving 101
5 Tips for Getting a Head Start on Your Taxes
Tax day is coming quicker than you’d think. This year, the IRS decided to keep tax day on April 15 instead of extending it into the summer like the agency did last year. That means you have less time to prepare, especially if you think you’ll owe taxes for 2020. The good news is that with some simple planning, you can get a head start on your taxes so you’re not overwhelmed when April 15 draws near.
1. Gather all of your tax-related documentation
The first thing you should do before sitting down to prepare your taxes is collect all of your tax documents in one place. Maybe it’s a folder you keep on your desk or just a stack of important paperwork. Whatever you choose, make sure it’s within arms reach to help speed up the process. I always forget a document or two, but it’s much easier to identify what you don’t have when you have most everything in front of you.
2. Break the work up into chunks
My next tip involves taking baby steps towards tax day instead of trying to cram the work in a few days before. It’s too stressful to file everything all at once. I like to break the tax work into chunks. Spend one day getting your income documented and the next on deductions. Tax platforms like Turbotax allow you to save and pick up where you left off, so it’s never been easier to piece out the work. You’ll also get a good understanding of what your refund looks like or what you might owe as early as possible so you can be prepared.
3. Take stock of any changes
We all had a lot of changes in 2020. Maybe your income decreased, you bought a home, or had a child. Whatever your situation, it’s important to take stock of any major changes to your life and how they might impact your taxes. Those are often the biggest positive or negative surprises when you sit down to file. Many tax platforms or tools like eFile will help you through these changes, but the earlier you identify them, the better.
4. Talk with a tax expert
If you have a lot of changes or tricky tax situations that you’re struggling with, it’s best to speak with a tax expert as soon as possible to give you enough time to sort them out. Turbotax is offering live, guided support with tax experts this year, as is H&R Block so you can get the help you need quickly. That makes it that much more important to break the work into chunks and take stock of any major changes.
5. Have an expert file for you
It might sound like a no-brainer, but if you’re not interested in preparing your taxes on your own or want to prepare part of your tax return and have someone look it over, the best thing to do is work with an expert. Like I mentioned above, Turbotax and H&R Block are both offering varying levels of expert support from CPAs in 2021. You can have them do all the work, jump in for any questions you might have, or give your return a final look before it goes to the IRS. Either way, you have options.
Join The Conversation