Tips to Spend Less Time On Taxes
It’s that time of year again. And though tax time should be no surprise, many Americans file for tax extensions. Whether you hire a tax professional or file on your own, you’re going to need to get organized to meet the April 18th deadline. Here are a few tips to help you stay on track so you can stress less and get your taxes filed by Tax Day.
Put Important Tax Dates in Your Calendar
April 18th is the stand-out date in all of our minds, but there are other dates during tax season to remember. For example, any 1098, 1099, or W-2s are supposed to be mailed by January 31. Other accounts, such as Keogh or SEP, have separate filing extensions. If you apply for and receive a tax-filing extension, set an alarm for at least a month out from October 17th, 2022.
If you use a digital calendar, create an event on important tax dates and set up notifications so you’re reminded ahead of time.
Create a Filing System
Whether it’s color-coded binders, folders, sticky notes, or digital, find and stick to a system that works for you. Be vigilant about grouping your receipts, files, and important paperwork so it’s easy to sort through.
If you do choose the paperless route, consider having a physical paper trail as well in case of an audit.
Learn Your Deductions
At over 74,000 pages, the federal tax code makes for heavy, unengaging reading. But some parts of the tax code and their deductions are going to be of greater interest to you. Claiming deductions benefits you by reducing your taxable income, meaning less money owed to the federal government.
Not sure where to start? Consider working with an accountant that can help determine what you can claim on your taxes. At Glownia Financial Group, we can refer you to a qualified CPA to save you time and reduce the stress of tax season.
Keep Your Receipts
Hold on to any receipts that you plan to claim for your deductions. File them in your preferred system, but also keep a digital backup in case they get damaged, lost, or faded. Itemize and categorize your receipts into their respective tax areas such as donations, office supplies, and travel.
At the end of tax season, take stock of what you need to keep and what is excess. Not all documents need to be kept indefinitely, and some documents, such as paper receipts, can be shredded after they have been filed. But it’s a good idea to scan some of your paper and keep digital copies just in case.
If you don’t have a paper shredder at home, we host an annual "shred day" every summer. At Glownia Financial Group, we can also help you sort which documents can be safely shredded and what needs to stay in your tax folders.
Cash vs. Credit
Though cash is easy to use when it’s on hand, if you’re buying something that could be part of your deductions, consider using a credit or debit card. That way, it’s easier to track the expenditure in case of an audit.
April 18th is fast approaching. Its important to stay organized and to have a system for gathering all your information so you can file on time. At Glownia Financial Group, we offer tax planning to our clients, but also coordinate with all of their outside professionals, such as their CPA and Estate Attorney.
If you're interested to learn more about how we can reduce the stress of your tax filing, or help with your investments, please contact us!
The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. LPL Financial and Glownia Financial Group do not provide tax or legal advice or services