Posted by Jim McClaflin, EA, NTPI Fellow

Preparing for Tax Season Next Year

Preparing for Tax Season Next Year

The 2016 tax season is beginning to wind down and you may be giving a sigh of relief over how much work you have done through these past few months. Many people finish up their taxes by the due date and then assume they are done with all of the work for good. But it is important to start planning now for what you would like to get done with your taxes next year. All of that scrambling and hard work can be a waste of time, but if you don’t start planning ahead now, you will find that you will spend a lot of this year scrambling around as well.

Being prepared is one of the best things that you can do for your financial future when it comes to paying taxes. Whether you are an individual who is trying to get a jumpstart on things or you are a business who relies on their books being in order to get the best possible outcome during tax season, being prepared ahead of time can make all the difference. When you are ready to start preparing for your tax season next year, find a good local tax professional who will be able to help you out every step of the way.

Pay Estimated Taxes

For those who are business owners or self-employed individuals, you may have to pay some estimated taxes through the year. These are never any fun, but they work similar to an employer taking money out of the paycheck for taxes each pay period. You will need to send these in every four months to ensure that you won’t be late and incur penalties and fees.

In most cases, you will be able to figure out the amount of your estimated taxes based on how much you had to pay for taxes the year before. Split this into four and make the payments each quarter. Even if you do happen to make a bit more this year than in the last, the IRS will not penalize you for this. You will simply need to just pay the difference during tax time. Paying estimated taxes can save you the headache and ensures that you are getting that tax bill paid off in no time.

Get Your Bookkeeping  in Order

It is never too early in the tax season to start getting your bookkeeping in order. Many people like to push this until the last minute, but this is just going to make a bigger headache for everyone involved. If you wait until the end of the year, you are setting yourself up for disaster as you search for all those receipts and other paperwork that have most likely gone missing through the year.

If you get started on a good bookkeeping method right at the beginning of the tax year and stick with it all of the time, you will find that this is an easier process. Sure, you will need to revisit it a few times each year, but when taxes came at the end, you would already have everything in order. A tax professional can help you to get this bookkeeping method set up and will save you a lot of time and money even if you need to have them take over the work.

Find a Tax  Professional

If you are not sure about where to start with your tax planning, a tax professional could be the perfect answer for you. They can listen to your concerns and come up with a tax plan that is going to work the best for your needs. It does not matter whether you are an individual or a big business who needs help, everyone can benefit from using a tax professional before and during tax season.

Before picking out a tax professional, make sure that you are looking at their history. Are they trained to help you out or did they just sprout up during tax season in order to make some extra money. Do they have some good reviews from sources you trust? If so, you may find that working with them can take off a lot of the stress and will make your life easier.

Work on Retirement  Plan

While this may not seem like a good way to prepare for your future tax seasons, it can actually help to save you money. Regardless of which of the two IRA plans you choose to go with, both of them will have some pull on how you will do your taxes, either now or later on in the future. Both of them have positives and negatives, but finding the one that will work the best for your retirement goals is critical.

Consider setting up a retirement plan, or starting to add to the contributions in the upcoming year. Not only is this a great way to prepare yourself for those golden years of retirement, but they will make all the difference when it comes to doing your taxes.

Figuring out your taxes well in advance is a smart financial move. It ensures that you are not going to go through a lot of scrambling again or that you aren’t missing out on some of the best deductions that you can qualify for. Consider hiring a tax professional right from the beginning to ensure you are getting the very best care with your taxes.

Jim McClaflin, EA, NTPI Fellow
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