Although many of us would like to not think about the next tax season until we need to start going through the process of filing, staying on top of things earlier rather than later can put you ahead of the game. Now, while some may want to do this while it is still fresh in their minds, some may want to take a brief break before going back their copy of their filed tax return. Either way, here are some things you should consider before completely burying the topic until next year.
What Could Have Been Better?
If you got dinged with an unexpected amount of money you owe to the government or you didn’t get as much money back as you hope, one of the easiest things you can do is analyze what went wrong. Look at the tax return you filed and determine areas where you could improve as well as the areas that worked in your favor. Consider closely your deductions and see if you will be able to deduct them next year as well. If not, you may want to consider how you can find other areas to offset the imbalance. At the end of the day, even if tax season turned out favorable for you, understanding what could have been better or what panned out perfectly can help you prepare for next year.
Consider Your Financial Trajectory
Say you are planning to buy a new home this year or you may have a kid being born, all of these things, and many other situations can have an effect on your tax status. What you should do is plan ahead for this, and determine how this will change your filing status, and determine how this will affect you the following year. If you are unsure how this may affect you, and you filed your taxes yourself previous years, now may be the time to find a good accountant that can help you file for the next year.
If you do not have a filing system in place, then you should get one. If you are like me, organizing is something that is only done halfway. I always dread when tax season comes around because that usually means digging through my records to find the necessary documents. Since upgrading to a better filing system, this last year was not nearly as stressful as years past. It can be something as simple as an expanding pocket file where you can put receipts, and other important docs away throughout the year.
Pay Attention to New Tax Updates
Along with stowing away documents throughout the year, you should also stay on top of current news in regards to tax law. With the current administration discussing their tax reform plans, you should be aware of how this will affect you. That way you can prepare yourself for anything that may arise ahead of time rather than walking into the new season not knowing what has changed.