Yep. It’s the new year and January is over. So, what does that mean? Well… two things. First, you’ve probably broken 90% of your New Year’s resolutions. Second, you should have all of your W-2’s, 1099’s, and other tax documents in your mailbox or junk drawer in your kitchen.
It’s begun. Tax Season. *shutter flows down your spine*
Although it’s not our favorite time of year, it’s a price we pay to live here in the United States (or anywhere for that matter). With that in mind, here are 5 quick tips to help all of us win tax season this year:
1. Learn About Updates to Tax Laws (Local, State, and Federal)
Over the course of 2018, we have seen many different changes to tax law that are now in effect here in the United States. We’ve seen changes to the standard deduction, tax brackets, and much more. Here is a quick synopsis of some of the major changes:
For more changes, look here: https://blog.taxact.com/tax-reform-changes-infographic/ or here: https://www.taxact.com/tax-reform
Here are some additional resources from other blogs that can help inform you of recent changes:
2. Get Organized
This is key to your overall success during this time of year. Make sure that you have a safe place in your home to store all of your tax documents you receive prior to filing. You will also want to make sure that you have ALL of the necessary tax forms/documents that pertain to what happened during 2018. You could be waiting on various types of tax forms such as: W-2 (Wages), 1099 (Various forms for income), or a 1040 (Various forms for income).
See what various forms you could be expecting here: https://www.bankrate.com/finance/taxes/tax-forms.aspx
Run through the list of events in your head of what happened in 2018 that could constitute you receiving a tax form to make sure you have everything.
Possible Life Events to Constitute a Tax Form: bought a house, added a dependant, started a new job, started a new business, completed some independent contractor work, or was a beneficiary of insurance income, etc.
3. Start Early
Seems like a no brainer tip… But seriously… START EARLY. Getting your taxes done for 2018 can either take a lot of time or no time at all. Depends on each individual situation and varies from year to year. The sooner you begin, the more time you have to check your work and make sure you get the best refund. Every year since I started receiving a W-2, I had my taxes done and turned in by the second week of February. Which also meant I got my refund that much sooner.
4. Choose the Right Tax Method and File
This part is crucial to your success in filing your 2018 taxes. Are you a person that wants someone to do it all for you? Do you like to DIY the paperwork to save money? Do you like a Hybrid of the two? It’s all up to you. Having someone else do the work for you is nice as it saves time, but it can also be more expensive.
BUT! Last but not least, and my personal favorite, is to do a DIY method with someone virtually holding my hand. When it comes to this method, I make sure that the software makes me feel confident that I did my taxes right (regardless of refund). Having to hassle with a tax audit can be stressful, time consuming, and expensive. SO! Try out one or two different products out on the market and use the one that makes you feel like a tax wizard.
5. Plan for an Awesome 2019
This is the best part of the whole process for two reasons. First is you get to decide on how you want to spend your 2018 refund (woot woot!). Whether you’ll be using it on some new tech and toys around the house or diapers (like me) it’s all up to you. Second, is that you can now take your fresh tax knowledge to apply it to a plan for 2019.
The best way to have a successful tax season next year is to know what you should do this year to handle your income and purchases. So, study up while you can at the beginning of this year by reading some books, blog posts, or by talking with your CPA friend in order for a successful 2019.
And that’s it my friend! Now go, go and conquer tax season before it’s too late (as in, do it before April 15th… because you have to…)