Simple steps for a stress-free tax season

To set yourself up for a successful and stress-free tax season, and to ensure you hit the upcoming tax filing deadline, start getting ready now with these simple steps:

 • Break tax preparation tasks into small manageable parts so that they don’t seem so daunting.

 • Decide who is going to prepare your taxes. If it’s a professional, ask for a checklist of items they need from you. If it’s you or your spouse, check last year’s tax documents for a sense of the information you’ll need this year.

 • Create a paper or electronic folder for tax-related documents, such as W-2 or 1099 forms, so that you can store them in one easy-to-find place. Make a checklist for all the items you’ll receive, so you know when everything has arrived.

 • Sort your receipts into categories and put the receipts for tax-deductible expenses — such as mortgage interest, charitable donations, childcare expenses, your FSA or HSA or other medical expenses — in a special file. If you have a home business, be sure to include relevant home maintenance, utility bill, business supply and parking receipts, as well as any other business expenses that may be tax deductible.

 • Total your paychecks. When you receive your W-2 or 1099 forms, check them against your records to verify the forms are accurate.

 • Track your mileage for charitable or business activities, including date, distance and the organization or business partner you were working for, as the mileage may be tax-deductible.

 • Shred non-tax documents that contain personal information, such as account or Social Security numbers, name, address, date of birth, etc., to help protect yourself against identify theft. Do retain documents that help determine the cost basis of assets, like your home or securities. 

 • Schedule time on your calendar or make an appointment with a professional to prepare your taxes. Given today’s busy lifestyles, this will help alleviate the stress of trying to find time last-minute.

After your tax forms are complete, make copies of them and any other pertinent information. Save this documentation in a safe place for at least seven years, or as directed by your tax preparer, in case you experience an audit.

To get a jumpstart on next year’s taxes, save your checklist on the materials you needed this year and the steps you took to prepare them so you can repeat the process with ease. For additional advice, consult a tax professional.

Robert Bonfiglio, a certified financial planner, is managing director and private wealth advisor at Rise Private Wealth Management in Bedford.

Categories: Finance