Start Now to Avoid April 15 Headaches
Sure, tax day is still a few months away, but the end of the year is only days away, and that means some financial deadlines are approaching. Pay attention to them now and you might find that April 15 goes more smoothly this year. Here are some ways to take some of the dread out of that dreaded day.
Start a folder. In the weeks ahead, you’ll receive year-end statements and records from various sources. Too many of us just set them aside somewhere (usually, a few different somewhere) and then have trouble finding them when tax time arrives. Get out a folder and write “Year-End Documents” on it, and then put it where anyone who sorts the mail can easily drop in tax-related items.
Capture electronic documents. Because a lot of year-end information now comes electronically, you’ll also need to create a folder on your computer for those documents or print them out for inclusion in your physical “Year-End Documents” folder. That way you won’t find yourself searching through emails in April.
Check the balance in flexible spending accounts. Check to see if you still have pre-tax flex account funds you can (or need to) use before the end of the calendar year. If so, schedule appointments, buy healthcare products, and do other things to maximize the advantage of those funds.
Capture year-end information. On Dec. 31, write down the mileage on your car’s odometer, total up your home-repair costs for the year and capture any other year-end information that might be hard to gather if you wait until April.
Max out for the future. If you haven’t maxed out your 401(k) or 403(b) for the year, make extra deposits to put in as much as you can before year’s end.
Share the wealth. If you plan to make charitable contributions, do so now … and then put the receipts into your “Year-End Documents” folder.
Check your withholding. The end of the year is a good time to check your paycheck withholding to make sure you’re having the right amount withheld. The most obvious withholding option is not always the one that’s most advantageous.
Back it up. You should do regular computer back-ups, but be certain to do a back-up at the end of the year to make sure you have all of the information you need for tax reporting in the event of a technology glitch in the coming months.
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Tags: April 15, Preparation, Tax Day