Everyone knows with the beginning of a new year, many people devote their time to resolutions. Whether they are trying to eat healthier, exercise more often, or become more organized, one of the most common and, unfortunately, soon forgotten new year’s resolutions has to do with finances.
We all want to start the new year on a good note financially. It is important and very wise to organize and review all of your finances as you get ready to begin a new year. A huge part of everyone’s financial plan includes taxes. However, even though we are beginning a new year, the tax year has not turned over yet in January. Tax Day is Thursday, April 15, 2021, which means this is the deadline to file all of your 2020 tax returns. It is after this date that the new tax year begins.
So, in a new year, it can be highly beneficial for you to get a head start on your taxes and begin organizing them ahead of time. Here are five great ways to get a start on this so that in April, while everyone else is scrambling, you can sit back and enjoy the beginning of spring.
Gather and Organize Your Records
Tax season is stressful enough! If you add in scrambling to find all of your documents with the deadline looming, you are setting yourself up for a disaster. Avoid this by getting a head start on this arduous process. Here are some tips on making organizing a breeze:
- Begin organizing the tax data that comes in the mail such as your W-2s, mortgage interest statements, and 1099s. Keep them all together in one folder as you collect them.
- Confirm the pricing on any funds or stocks you may have sold throughout the year.
- Gather information such as receipts for specific purchases.
Use the Correct Tax Forms
The Internal Revenue Service’s website makes it easy to find and download any tax forms or documentation you may need. You can simply search for and print the form from your home computer or have them sent in the mail to you directly.
Make Sure to Provide IRS with All Dependent Taxpayer IDs
This is a small but crucial step that can often be overlooked. To ensure proper filing and dependent credits, make sure to provide your dependents’ Taxpayer Identification Number, which is most often their Social Security Number.
Pay on Time
To avoid heavy late fees from the IRS be sure to promptly file your return by April 15th, 2021. However, if you are unable to meet this date, be sure to file Form 4868, which will extend your filing deadline to October 15th, 2021.
Seek Assistance from a Professional Tax Service
Filing taxes and figuring out all of the ins and outs of the system is difficult and can be very tedious. So, many people choose to gather their tax materials and have a Certified Public Accountant perform the filing for them.
Venture CPAs is an accounting firm in the state of Colorado that offers a wide variety of services that are sure to fit your every financial need.