5 Tips to Make Tax Day Easier—This Year or Next
“O God, who with untold mercy were pleased to choose as an Apostle Saint Matthew, the tax collector, grant that, sustained by his example and intercession, we may merit to hold firm in following you. Through our Lord Jesus Christ, your Son, who lives and reigns with you in the unity of the Holy Spirit, one God, for ever and ever” (prayer to St. Matthew, patron saint of taxes).
By now, you may have already filed your taxes—but even if you have, please keep reading. I have many tips to help you prepare for tax season throughout the year that can help you have an easier time next year.
1. If You Own a Business, Consider Hiring a Bookkeeper and a CPA
Many people fall into the trap of wanting one person to do all of their finances, but there’s two reasons that I believe, as a bookkeeper, that hiring one person for bookkeeping and taxes is not a good plan. The first is that it’s always good to have two sets of eyes reviewing all your business financials. Many times, my clients’ CPAs see things that I didn’t catch—and vice versa. Your CPA may fall behind on your bookkeeping work when they’re busy during tax season.
I have also seen many business owners have to amend their taxes because they didn’t have someone reviewing their work, and they found that they overstated or understated their income and/or expenses. Sometimes, they paid too much in taxes, and other times, they did not pay enough. We want our tax records to be as accurate as possible, and the best way to ensure that accuracy is to hire professionals.
2. Keep Your Documents Organized
The easiest way to make doing your taxes easy is to stay organized all year. Keep all your receipts in an electronic folder or a file folder in your home. Keep good records of anything that may affect your taxes. As tax forms come in by mail and email in January, keep them all together. If your tax professional sends you a checklist, work on it early, and give everything to them as soon as possbile.
3. Make Decisions Early, and Don’t Procrastinate
Decide early how you want to tackle your taxes. Do you want to do it yourself with online software? Do you want to hire a CPA or enrolled agent (EA)? Determining early the process you will use to file your taxes will make the process go much more smoothly when the time comes.
4. Take Advantage of Available Resources
There are many resources available to help you navigate the tax-filing process. If you do not have a tax preparer, there are online tax preparation services available, such as TurboTax from Intuit. Many libraries have people who can answer your questions through the Volunteer Income Tax Assistance Program (VITA). AARP also offers assistance, and you can find links to support, answers to your questions, and forms, on the IRS website.
5. Plan Ahead for Next Year
Use this year’s tax day as a way to plan ahead for next year’s taxes. Consider anything that may affect your tax situation. For example: Do you want to change banks or investment institutions? Will you be getting a new job, starting a new business, getting married, or having children? You may need to adjust your withholdings or estimated tax payments accordingly to avoid surprises on your tax return next year.
Whether you have filed your taxes for last year already or are still working on it, I hope these tips will help you stay organized this year and for many years to come. When it comes to filing your taxes, it is easy to become overwhelmed with all the information and options available. Don’t let it weigh you down! Take it one step at a time, and you can become a pro at navigating the tax system.
Beth Anne Kaczmarczyk is a cradle catholic and wife who is passionate in helping others in her community with her husband through the Knights of Columbus. She has been a QuickBooks Online ProAdvisor for over 10 years and runs her own Bookkeeping firm at BethAnneBookkeeping.com. She is passionate about helping small businesses understand their business finances so they can have less stress and grow their businesses. You can connect with her on her website, Instagram or join her monthly newsletter to receive a Monthly Bookkeeping Checklist!