MoneyWisdom Blog

10 smart moves to make after filing your taxes

Posted by Diana Burrell on Apr 23, 2018 9:22:34 AM

Organize-paperwork

Most Americans start thinking about tax preparation shortly before April 15, the traditional date tax returns are due to the IRS. 

I was one of those Americans. I was always making a vow that next year’s tax season would go easier because this year was the year I’d get my tax act together. But then, you know…life. The next thing, it was the following April and there I was again, tearing around the house like a whirling dervish, frantically looking for a wayward 1099. It struck me a few years ago: the best time to prepare for next year’s season? The days after tax returns are due, when my head is in the game and I’ve got taxes on my mind.

Here are 10 steps you can take in the days after you’ve filed your taxes to make next year’s tax season less stressful:

  1. At the very least, get a fresh folder and label it “[upcoming tax year] Income Taxes.” For example, if you just filed your 2017 taxes, label your new folder “2018 Income Taxes.”
  2. Print out two copies of the return you just filed — one for this year’s file and another to stick in the file you just created for reference. This way you don’t have to dig around in your files to see what you did in the previous year – you’ll have the data you need at your fingertips.
  3. Check to see when paperwork or payments will be due over the next year and mark them down in your calendar. This includes estimated quarterly tax payments, tax filing extensions, corporate and partnership filing deadlines, sales tax payments, and W2/1099 filings.
  4. Correct any reporting errors you found in this year’s taxes. For example, I received a 1099 from a publisher who reported the income on my social security number and not the Employer Identification Number (EIN) belonging to the business I have with my co-author. This meant I had pay tax on income that was only half mine. I got proactive and asked the publisher change the number in their system before I forgot about the issue.
  5. Think about where you could improve with next year’s taxes while the struggle is fresh on your mind. Maybe your receipt organization could you some work, or you didn’t track your mileage efficiently, or you missed paying quarterlies, which cost you money in penalties. Look for ways you can improve in these areas. (See my next tip!)
  6. Look for ways to make tax prep fun. I’m an advocate of making heinous tasks as enjoyable as they can possibly be. For example, I struggle at keeping small bits of paper organized, but since I love using the camera feature on my phone/iPad, it makes keeping track of receipts and charity donations a snap (pun intended) throughout the year.
  7. If you use an accountant, ask for a postmortem on your tax prep. Where did you do well? What could you improve moving forward? Don’t be shy about asking for their advice on how to improve. Believe me, they’ll be happy to give you advice because it’ll make their jobs easier next April.
  8. If you know you have to pay taxes throughout the year (for example, estimated quarterly taxes) consider opening up a separate share draft account to save for the expense. You could even open up a CUThrive account to cover next year’s estimated quarterly payments…now that’s forward thinking!
  9. Schedule a day once a month to update your personal bookkeeping. I always pick the 15th because, well, April 15th. I balance accounts, assign tax categories to expenses made over the last 30 days, and file tax-related paperwork that comes during the year in my folder. This way I don’t have a year’s worth of bookkeeping to do before turning my attention to, ugh, taxes.
  10. Set up a reminder to buy tax prep software as soon as it’s released, anywhere from mid- to late- November instead of waiting till last minute. Consider the purchase a holiday gift for your sanity.

Do you have any tips to make next year’s tax season go smoother? We’d love to hear them! Share your best advice in the comments below!

 

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Topics: Money Management, Taxes

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