Tax season has now passed, and it’s time to create a more efficient game plan for next year. Unless you have a proper tax strategy prepared in advance, tax season can be a huge hassle. Fortunately, there are some relatively straightforward steps you can implement now to prepare for next year. If your taxes caused more than a minor headache in 2018, follow this advice to better plan for the 2019 tax season.
For many, the most time-consuming part of filing taxes each year is gathering all the required paperwork and information. Finding forms, receipts, passwords and other documents can be an enormous hassle, especially if left until the last minute. However, this stress can easily be alleviated by getting organized now.
Keep all your needed tax documents in a convenient location. There are plenty of programs and apps that help with this, but a trusty filing cabinet can work, as well. Track expenses, home-related costs (real estate taxes and mortgage interest, for example) and charitable giving. By getting organized early, you will have plenty of time to properly file your taxes next year.
Review Tax Reform
We wrote about some of the ways to take advantage of the new tax law prior to January 2018 in this blog post. However, it is still a good time to review how the new tax code will and already is affecting you. Tax-bracket and tax-break changes may affect your personal finances, so it’s smart to research exactly how much they will be influenced by this new tax reform. Small business owners especially need to know about what deductions have changed, including meals and entertainment, business vehicles, medical expenses, etc.
Create Financial Goals and Plan for Next Tax Season
After reviewing tax reform, start planning ahead. Review what worked for you last year and what could use some tweaking. Think about major life changes looming on the horizon, such as marriage, buying a home and/or starting a family. It’s also a good time to look into next year’s possible tax refund. If you want to control the size of your refund in 2019, make the necessary changes to your withholdings on Form W-4.
It is also a great time to schedule an appointment with a CPA to discuss a beneficial tax strategy for you and/or your business.