Friday, March 15, 2013

Get Organized For Tax Season

In the words of Dave Barry, "It's income tax time again, Americans: time to gather up those receipts, get out those tax forms, sharpen up that pencil, and stab yourself in the aorta."
Filing taxes = huge pain. We all know it. We all go through it once a year. And while there's no way around tax season, there is a way to make the process less stressful.
P.R.E.P.A.R.A.T.I.O.N. (I'm hearing a collective sigh from all the procrastinators out there!) A little bit of preparation can make a huge difference in your tax filing experience.
Here are 5 steps to a help you file your taxes, on-time and un-frazzled...
(Think T-A-X-E-S!)
(1) Tally: Decide how many hours you'll need for tax prep.
First, choose a final date, such as "I want to be done with my taxes by 1 April." Then work your timetable backwards from there, planning around your work schedule, family responsibilities, and extracurriculars.
Second, think about how long it's taken you in the past to file. If 6 hours of tax prep has been enough in the past, then this year will likely be no different unless you've had major changes in your life. So pencil in 2 hours on your calendar for 3 Saturdays between now and April 1st, or maybe 1 hour each Monday evening for the next 6 weeks. Etc, etc.
Looking ahead will prevent a last-minute tax crunch and all the pressure that comes with it!
(2) Assemble: Gather all tax-related documents.
Search your files, baskets, and bins. Your objective? To find any and all receipts, canceled checks, and other papers that support an item of income or deduction.
Be on the lookout for important forms like W-2s and 1099s in the mail.
And don't forget about the charitable donations you've made over the last year! .
(3) X-cessorize: Compliment your tax prep efforts.
I'm not talking shoes and purses here! It's all about storage. Now that you've got each and every one of your tax documents assembled, they must be organized in one central location, so as not to get lost.
There are lots of different tax organizers that can keep your tax papers in order. You can dress 'em up in style with something like the Buttoned Up Tax Filer. Or if you're not into fancy-schmancy, then you can dress 'em down with the oldie but goody manila envelope.
(4) Evaluate: Assess how you want to file your return.
Will you prepare your return or go to a tax preparer? Do you qualify to file at no-cost using Free File on the IRS website? Are you eligible for free help at an IRS office or volunteer site? Will you purchase tax prep software or e-file online?
There are many possibilities to consider! Weigh them all and find the option that best suits your needs. You may need to make modifications to your tally and time line, if necessary.
(5) Schedule: Make a date to file your return.
If you're doing your own taxes, make an appointment with yourself. If someone else is doing your taxes, make an appointment with him/her.
Schedule asap - before the calendar fills up! And schedule a date several weeks ahead of the April 15th tax deadline, just in case something comes up and you need a bit more time to complete filing.
And remember: It's NEVER too early to start tax prep for next year!

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