As April 15 quickly approaches, many of us have already filed taxes and will likely not think of them until next year.   However, the year is going by quickly – it’s already Spring – and before you know it, tax preparation will be on us again.  With proper organization and planning, you can be in much better shape for next year’s tax filing season.  Here’s how:
Check Tax Withholding
Those with big refunds this year should think about lowering their income tax withholding by increasing exemption allowances if income and eligible deductions will be similar to 2015. On the other hand, if you came up short and owed a substantial sum when you filed this year, you may want to increase your tax withholding and/or make quarterly estimated tax payments during 2015.
Review and Discuss
Getting together with your tax professional really isn’t just for when you need to file taxes.  Make sure you understand your current return and tax liability so you are better prepared the next time around.  Keep your tax professional up-to-date on changes during the year and seek their input when questions arise. Your accountant can review your tax situation and offer advice to make necessary modifications and plan ahead.
Get Your Books in Order
For those of you running your own business or who own rental properties, now’s the time to get everything in order so you’re not scrambling come end of the year.  You may be required to issue 1099’s to various business associates.  Start now to get your books in order so you’re prepared to issue those forms next January.
Keep Business Separate
Another tip for business owners:  Keep your business money and accounts separate from your personal money for easy record-keeping.  Maintain a separate checking account where all receipts are deposited and all business disbursements are made.
Keep Track of Your Receipts
Don’t wait until the end of the year to start thinking about deductions – start tracking the expenses you can write off next year.  If you are ever audited by the IRS, you will need to show proof of these expenses and it is smart to keep your records in order now.  Maintain records of the following expenses for deduction purposes: unreimbursed medical expenses, unreimbursed job expenses, educational expenses, charitable contributions, and capital investments.  Also, be sure to retain receipts for home improvements that may qualify for special tax rebates or reductions, or large purchases that may be eligible for state sales tax deductions.
Use Personal Finance Software
Whether you run your own business or are employed by someone else, it makes smart fiscal sense to keep track of your income and expenses.  Try using an account management service like to manage all of your bills and statements in one place online or via the mobile apps.  In case you ever need to refer to a charge on your bank statement from the previous year, you can pull it up quickly on Finovera.
Be Aware of Lifestyle Changes
Planning to get married or have a baby this year?  Be aware that such events will probably change tax liability when filing season returns.  Seek advice from your tax professional to answer questions on how a life-changing event may alter your tax situation.
With a little planning, you can set yourself up for a simpler and less stressed tax season next year.  It’s never too early to start planning ahead.