5 Tips For NEXT Tax Season

5 Tips For NEXT Tax Season

Posted by Hank Cleare in Financial Planning 17 Mar 2016

I know what you’re thinking; Hank, I need help now! Why are we talking about next year already?!


Most of you are focused on gathering and preparing to complete your 2015 tax return. If you feel like this year is more difficult than other years, you’re not imagining things.  


As the complexity of investment products has grown, so has the time needed for companies to send you their tax forms.  Some companies are planning to send their last round of forms on March 15th.  That’s right. You now have just 30 days to complete your tax return in order to file on time.


While I can’t do much to help you for last year, here are five tips to help you be better prepared in the years to come. 


1. Buy an accordion file with the months of the year (January through December). Try to spend a little time each month to file critical documents like property taxes, mortgage closing statement, or large purchase receipts.  These large purchases for your home might have favorable deduction under an energy saving incentive, or if you live in Florida, you might be able to deduct your sales taxes.  If you’re not sure, save it and you can sort through it later.  As Kimberly pointed out to me during her review, “People don’t use accordion files anymore!” To which I replied, “That’s why taxes are so much more difficult today.”  But I digress.  Another option is to use a cloud-based service like Microsoft Office 365 to scan and save your documents.  This option is nice because you can easily share and review files with your tax advisor.


2. Make a list of your accounts. Take out last year’s tax return and use it to make a quick list of your various accounts.  For Schedule B, list all the accounts you received interest and dividends from, and for Schedule A, list the property taxes and mortgage interest.


3. Set a recurring reminder to call your tax advisor in early January to schedule an appointment after March 15. If you wait to the last minute your tax advisor’s calendar might be full.


4. Consolidate your accounts. If you have accounts with multiple companies, it creates more paper to keep track of during tax season and may increase the chance of missing something. Take the time to place calls, handle paperwork, and consolidate accounts where possible.


5. Track charitable donations throughout the year and save them in your file. Also, set another recurring date on your calendar for October 15th.  Use this reminder to prompt you to ‘clean house’ and make any donations, discuss tax loss harvesting strategies, and to check in with your tax advisor about any other strategies that might help in the current year.


Remember, there’s no ‘perfect’ time to get organized. Just dig in and do it. Getting started is half the battle.


Good luck with everything!