Completion of this year’s taxes is something that you should pat yourself on the back for, but don’t do so for too long. You should start planning for next year’s tax return immediately to make it run even smoother while allowing you to potentially save more when you file next year.
By reviewing what you’ve learned about the tax process this year and examining some key points, you may be able to do just that.
Let’s take a look at some things to consider with regards to next year’s tax return.
What did you learn this year?
Before examining some points for next year’s taxes, let’s look at what you’ve learned through this year’s round of taxes.
Was your tax return difficult to file because you had to scramble for the information and records you needed?
Did you have to reconstruct parts of your information or request duplicate reports?
Did you work with a professional to file your taxes?
Did you learn something unique about filing taxes for yourself?
Consider what you learned, then put that to use in preparation for next year’s taxes. You’ll quickly become adept at filing by reinforcing your weakest spots.
Step-by-step considerations for next year
The trick to saving more on your taxes next year requires that you prepare for them in advance. That’s why we’ve taken the time to list some important considerations for you that may help when the time for filing this year’s taxes rolls around next year.
Follow these step-by-step considerations to make filing your taxes easier, smoother and potentially cheaper.
1. Did you get a large refund this year?
If you received a large refund, then you may be withholding too much for your taxes. This could mean that you’re paying too much in taxes when you or your company withholds, which in turn means you may be receiving less than you should.
See IRS Publication 505 for more information on withholding and estimating taxes.
2. Were you prepared?
If you found yourself scrambling to find receipts, pay stubs, W-2 forms and other important financial information for your taxes, then it may be time to consider setting up a sorting system for this year’s information.
File folders, organization boxes, file cabinets, and, for the particularly tech-savvy individual, a computer scanner may be what you need to make your sorting system perfect.
3. Did you maximize your deductions?
Were there deductions you couldn’t take because you lost records? Were there instances of expenses you could claim that you didn’t know about?
For example, that loan your brother-in-law never paid back could have been claimed as a non-business bad debt.
4. Did you earn too little?
Taxes can make for a startling realization that your job simply isn’t adequate for the life you want to lead. Couple this with the deductions you can take for expenses while seeking a job and education, and you may just have the right motivation to find a new job that pays more this year, finish your education, or start your own business.
5. Did you mismanage your money?
You might make plenty of money, but you’re no good at handling it. You’re left with pennies after you’ve paid the tax man what was due to him.
If this is the case, then you might want to take advantage of online classes in financial management like the ones offered by the American Financial Services Association Education Foundation.
6. Who Did Your Taxes?
You might have paid premium prices for someone to do your taxes. Maybe next year you should try doing your taxes on your own.
You also might have tried to do your own taxes, but you weren’t sure if what you did was correct. You may want to consider spending a little more next year to pay a tax professional to do your taxes correctly and to save time.
7. Did you make mistakes?
If you made mistakes on your tax return, then it’s imperative that you file an amendment as soon as possible. A simple math error could be costly.
Robert W. Wood wrote for Forbes.com concerning tax amendments. He suggested that “tax returns are like lumber – measure twice, cut once.”
Take your time next year to carefully measure your taxes before you get in a hurry to beat the tax return deadline. Ample time can save you from ample problems next year.
Making Next Year’s Taxes Even Easier to File
The key to improving your ability to survive tax season is preparation. Assessing your recent tax filing experience will help you identify your strong and your weak points in the process, which in turn will help you refine next year’s tax filing and avoid costly problems and hassles.
Preparing for the entire year before you file your taxes is one way to make next year’s tax filing easier. An easyway to do this is to connect with the Internal Revenue Service online using their social media, news and other resources.
Learn more at: http://www.irs.gov/uac/IRS-New-Media-1