Defeat the Beast: Start Prepping for Tax Season Now
Even if right now tax season seems like a far-off specter of the imagination, beyond the gauntlet of holidays between now and the end of the year, when it comes to filing your taxes it’s always better to be five steps ahead than one behind. Start preparing your books now, and make April 2018 as painless as possible when it comes around.
Know the Changes to the Tax Code
Several new stipulations and tweaks to the tax code began to take effect on January 1st of this year, so take the time to brush up on your knowledge and ensure you’re up to date on every part that may apply to you as an individual or as a business. In particular, there are some new deadlines for corporations and an expected delay on tax returns next year. Even if none of the recent changes have an impact on you, it’s important to be familiar with as much of the tax code as possible, so take this time to review any areas you might be rusty on! Be sure to not to overlook any possible changes to laws on the state level as well as national.
If you’ve heard this one once, you’ve heard it a thousand times—but if it’s being repeated, it’s for good reason. It may be easy to keep things tidy and in order when you’re fresh off your previous tax return, but at this point the receipts and forms have started to pile up and—if you’re like most of us—you’ve started to get lazy. Set a day aside and whip your organizing system back into shape now, before it gets to be March and you’re drowning in a sea of paperwork. Your future self will thank you for it. Try to keep things fun and engaging by setting up your filing area to make it more aesthetically pleasing, or perhaps revamping your color-coding system.
Rethink Your Withholding Instructions
While it makes sense in the short term to make each paycheck throughout the year as big as possible by keeping your withholdings small, it may be time to consider a change. With savings account interest rates generally low all around, that little bit each week or month won’t do you as much good as the larger, cumulative refund amount. If you start budgeting around a larger withholding now, you’ll be able to maximize that deposit when it comes around.
Record Your Deductions
If you don’t have a concrete recording system, then for every time you remember to make note of a business expense there are bound to be three that you don’t. If you’re more of the digital type, then there are plenty of apps on the market for categorizing and logging business expenses, both free and paid, depending on how comprehensive you need them to be. On the other hand, if you prefer having physical evidence, then re-new your commitment to keeping a meticulous record of travel hours, gas costs, and the other miscellaneous expenses that pile up. If you don’t always have pen and paper on hand, then utilize your smartphone’s voice memo or notes function to make a quick memo for yourself to file away later.
Treat Your CPA to Brunch
It is less stressful for everyone involved if you get some of the questions and uncertainties you may have off of your chest now, when your CPA has the time to properly address the issues, as opposed to in the last month before April 15th, when both of you have an encroaching deadline hanging over your heads. On top of that, if you have not already shown your CPA some love for their hard work this April, then now is the time to let them know how much their efforts mean to you. Take them out to a nice brunch, pick their brain, and ask how you can improve your habits and methods to make things easier on the both of you.