March 14, 2008

Make Next Year’s Tax Return Effortless

By Dana Joseph

As you’re getting ready to visit your tax preparer to have your tax return completed, you may find your heart filled with dread. Even if you’re expecting to get a hefty return back from the IRS, the work required beforehand can be pretty intimidating. Do you have all of the necessary receipts? Where are your withholding records? Although it’s too late to simplify planning for your 2007 return, there are two things that you can do now that will reap huge rewards during next tax season.

First, promise yourself that you will keep your paperwork organized this year. Now, no one expects you to suddenly enjoy dealing with paperwork. You just need to create a system that encourages you to keep your papers sorted. Make file folders with the names of major deduction categories marked on them. Then you can simply drop your receipts and forms into the correct folder as the year goes by.

Your receipts from the pharmacy will go into the “Medical” folder. The contribution acknowledgement you get for the box of clothes you dropped off at the local thrift store will go into the “Charitable Contributions” folder. You get the idea. Don’t go crazy and try to get too detailed in your sorting. At the end of the year, just having these items sorted into categories will make your life (and your tax preparer’s life) much easier.

The other important step in planning for your 2008 tax return is to pick your tax preparer’s brain. Often, at the end of your tax preparation appointment, your tax professional will ask you if you have any questions. Don’t be shy; this is your chance to get advice for anything that you think might come up during the next year.

Get your tax preparer’s input on things that you should be doing. He’ll tell you to do things like getting that receipt from the thrift store or keeping track of your business mileage. His suggestions will guide you in the categories you’ll want to use in your new filing system. Remember that it’s always better to save something that you think might be important to your tax return and find out that you didn’t need it than to wish you had kept something that you threw out.

While you’re asking your tax preparer questions, be sure to tell him about any big changes you foresee in your life over the next year. If you’re getting married in 2008, he’ll be able to tell you if you need to adjust your income tax withholding. If you and your spouse are thinking about starting a family, your preparer will be able to give you an idea about how that will affect your tax situation. This is your opportunity to plan ahead a little.

Bear in mind that no tip is going to make you enjoy filing your income taxes. However, these two suggestions can help you avoid that feeling of dread you’ve come to associate with tax season. Your tax preparer will thank you, too.

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Topics: Taxes |



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