The IRS says taxpayers spend an average of 13 hours working on their taxes. So, it’s no wonder that many Americans procrastinate when it comes to filing. Between going to work, chauffeuring the kids, and getting dinner on the table – who has an extra 13 hours to spare? That’s why it can be so important to get a head start. With nearly three months before the deadline, starting now makes it possible to spread out those 13 hours, triple check everything and still get done early. Here are some time-efficient ways you can prepare for tax season and reduce tax paperwork stress.
There’s no need to wait till hours before the deadline as that’s when things get stressful. Instead, make a deadline for yourself (well before the April 18 filing deadline this year) and treat that designated deadline like it’s the real thing. Once you have your deadline, schedule time on your calendar to work on your taxes. For some, that means scheduling with your tax preparer, but even if you do your own taxes, schedule an appointment with yourself and treat it like the real thing.
Break it into manageable chunks
Chances are, you aren’t going to sit down for 13 hours straight and finish your taxes. Break it up into different sessions. The first step is deciding how you’d like to file your taxes. Will you go to an accountant or fill yourself? Send in tax returns via mail or file electronically?
Go into your appointment as prepared as possible. If you are seeking professional help, then you want to pay them for their expertise, not their ability to organize your paperwork. Start gathering your documentation; social security numbers, mileage logs, health care payments, charitable donation receipts – the list varies person to person. This infographic from H&R Block provides you with a checklist you can follow.
Take inventory of anticipated forms
There are a lot of forms that should be mailed out by January 31. In addition to W-2s from employers and 1099s for the self-employed, you should receive paperwork if you’ve collected unemployment, made mortgage payments, collected social security, had investments, and several other scenarios. Make a checklist of all the forms you anticipate receiving and follow up if you still haven’t received anything shortly after January 31. Make sure you keep in mind any tax deductions that you can benefit from as well.
Dive in and get started!
The IRS opens tax filing season in late January every year, so there’s no reason to wait until April to start your work. If you have a refund coming your way, choose direct deposit and you could get your refund within 7-14 days as opposed to eight weeks for other methods. That means you could have your refund check in hand long before the majority of Americans have even given filing taxes a single thought.
Assess for next year
When filing your taxes last year, you probably discovered some ways you could make this process a whole lot easier — but did you do it? Set up a filing system that works for you, whether that means an old-fashioned shoebox system or a detailed digital spreadsheet with scanned receipt attachments. Plan ahead and you may be spending a lot less than 13 hours filing your taxes next year, which will certainly reduce tax paperwork stress.