10 Ways To Start Tax Prep Now

Being organized with all your tax records and financial statements is very important. Leaving something out when you file your taxes could cost you money. It could even trigger an audit. That’s why the best thing you can do to start your tax prep early is to organize all your important documents.

Understandably, you won’t have all the documents you need just yet. But you can get a jump on your tax prep anyway with last year’s documents. Using last year’s tax filing documents as a guide, you can determine what paperwork you are expected to receive this year. Make yourself a checklist of what should be coming in the mail so that you can keep track. This will also alert you to any documents you don’t receive.

It can be easy to forget about certain documents that aren’t directly from an employer. For example, you might also be expecting a mortgage interest statement or dividend income (1099-DIV). By making sure you have everything you need before filing your taxes, you’ll be able to avoid amending your tax return in the future.

Hopefully, you’ve saved all your receipts for items that qualify as tax-deductible. If so, now is the time to get them together. If not, you may be able to retrieve them by looking up online transactions and records. Many online transactions can be easily retrieved. You can also try calling retailers and businesses if necessary. They may have records of your transactions and can provide a receipt if you need it.

There are many ways you can gain help with your tax filing as well as your advanced tax prep. Taking advantage of features from tax prep services such as TurboTax, HR Block and even the IRS can make tax prep easier.

Another great way to start your tax prep early is to sign up for an online tax account with the IRS. Doing so enables you to access prior years’ tax documents. You can also use your account to make payments if necessary.

Many tax prep services also offer tax prep assistance for an additional price. Whichever service you are choosing to use, see if their assistance features are worth it to you. For example, you might benefit from paying a little extra to be able to receive assistance from a tax professional.

Every year, there are changes to the tax laws. Over recent years, many changes have been much more significant than others. To get a head start on your tax prep take the time to learn about the 2021 changes. Most new editions of popular tax software packages will already have these changes in place automatically. But, it still helps to be aware of them yourself so there are no surprises.

Some of the major differences this year include:

• Updated income brackets.
• Student loan forgiveness is not considered taxable income.
• Higher deductions for medical expenses are allowed.
• A boost to the child tax credit.
• Higher standard deductions.
• Changes to charitable deductions.

Filing your taxes yourself is easy with the aid of professional software packages. But which one do you choose? Begin your tax prep early by researching the different tax filing software options available. Of the many different options, you’ll want to compare the features and prices. Each option typically has different packages available to suit your specific tax prep needs.

If you select a software package early, you can even begin entering your information early. This will give you plenty of time to see what kind of deduction you might get. It will also give you time to go over everything thoroughly and avoid mistakes.

As an extra tax prep tip, choose to file your return electronically. This will get to the IRS faster and you’ll also be able to track its accepted status. And, when you choose direct deposit for your tax refund, you’ll receive it faster as well.

If you are choosing to work with a tax preparer, you’ll want to schedule your appointment early. If you choose to wait, you may not be able to spend as much time with your preparer as you need. Your tax preparer will get much busier as tax season progresses. Getting an early appointment affords you ample opportunity to go over things with your preparer thoroughly.

If you already know that you will be getting a refund, great! But what are you going to do with it? Consider this thought as part of your early tax prep. You can simply keep your refund, of course, but there are other options. You can apply some of it to next year’s taxes. Or, you can contribute some or all of it to a retirement or health savings account.

Tax filing seasons in 2022 starts on January 24^th. The deadline for most people to file their taxes will be April 18^th. Taxpayers in Maine or Massachusetts will have an extra day, till April 19th. This is due to the Patriots’ Day holiday in those states. If you file a request for an extension, you will have until Monday, October 17, 2022, to file your taxes.