4 Ways to Reduce Stress for Next Tax Season
Believe it or not, tax season is not that far away! After recovering from the highs and lows of the holiday season, there it is: the W2 Form reminding you that not only spring is around the corner, but tax season as well!
Whether you’re going to owe the IRS or receive a refund, the process of finding out can often be grueling, even with the best tax software. If one chooses to prepare their own taxes or hire someone to do it for them, the same questions will still need to be answered. How smooth this process goes depends on you!
To reduce the stress and anxiety that tax season is known for bringing about, it will ultimately depend on how efficiently you are able to answer those questions. However, there are ways to make this challenging time of the year less stressful. Most of the frustration generally comes from not being able to retrieve the information requested. How many panic attacks have we endured around this time of the year because we couldn’t find a certain form?
To avoid those mild panic attacks, here are 4 ways to reduce stress for the upcoming tax season:
1. Store Any Tax Related Forms in a Folder
Around the beginning of the year, you start receiving tax-related documents in the mail that you didn’t even know you needed. Some people probably wouldn’t admit that they have no clue why they were even entitled to that particular document; ignoring and discarding it only to wonder where in the world you placed it when the tax preparer calls for it! Here’s a word of advice: Anything you receive in the mail that is marked “tax-related”, file away in a folder. You’ll be glad you did!
2. Keep Legal IDs and Documents Together
It is important to keep legal identifications like birth and marriage certificates, adoption papers, and social security cards on hand. The information in theses documents are generally something most have already memorized. Then again, if you have a handful of dependents to claim, it is recommended to have the related documents on-hand. There’s no shame in forgetting your child’s birthday! Plus, it’s always good to verify the information you are submitting to the IRS. Additionally, if for some reason, the IRS calls for proof of these documents, you will have them readily available.
3. Keep a Folder of Prior Tax Returns
One thing is certain, when filing your taxes, you will always need to know what your prior year’s income was, in addition to the previous year. So to keep things simple, just store each year’s tax filings away in a folder labeled for that particular year. This includes all the related documents to support that year’s tax filing. It is recommended to keep tax records dating back to at least 5-7 years. You’re tax-preparer will thank you for it!
4. Compile Tax-Related Document Throughout the Year
This is the best favor you can do for yourself regarding prepping for tax time. Consider completing a monthly or even quarterly tally of your household finances. It’s a simple process organized in these few points:
ü Keep a labeled folder of rental or mortgage payments
ü Keep a labeled folder of legal documents and identification
ü Keep a folder designated to Medical/Dental Expenses – Although there is a standard deduction, you might qualify for a bigger one.
ü Keep a Separate Record of Any Work-Related Expenses
- Uniform Maintenance
By filing these documents away every month in its respected folder, you are slowly and efficiently preparing for the best tax season you’ve ever had! We can alleviate your tax-related stress. Call us at 1-877-825-1179 or online to learn about other ways to breeze through the tax season!