Easy Ways To Prepare For Tax Filing
Many people find paying taxes to be a frustrating
, painful, and time-consuming exercise. But with a little preparation and help from technology, you can revolutionize your tax paying experience into something that is, if not pleasant, at least bearable.
One of the best things you can do to stay on top of your taxes is to keep current, organized records (store valuable records, like deeds and wills, in a safe). Good, effective record keeping can be accomplished by separating information into files or folders categorized according to areas like income and itemized deductions or expenses. One way to ensure good organization is to divide the year into quarters. Every quarter, update your tax records.
While it's tempting not to think about taxes after April 15, remember that you paid your taxes through the end of December 31 (if you are a calendar year end individual and not a fiscal year end individual) and that taxes have been accruing since January 1. At the end of the spring or beginning of the summer, you should go back and make sure your records are in good condition from the beginning of the year.
By the fall you should have an approximate idea of your salary, wages, bonuses, commissions, etc. Start estimating your annual income and taxable income so you know if you are behind or ahead on payments. In the winter begin preparing to file your taxes. Gather all of your tax forms, documents, and receipts. Once it's the new year, file your taxes as soon as you can. If you've been diligent during the last three quarters, it should be a fairly quick process.
Remember to hold onto important filed tax records for about seven years. Keep your paycheck stubs, receipts for deductible items, W-2 and 1099 forms, and records for insurance, medical bills, and charitable contributions. Most importantly, don't forget to stay current on your record keeping and to evaluate your status again in the summer. Taxes never end!
Luckily, several programs are available to make tracking expenses and filing taxes easier. A program like Quicken can help you record your expenses throughout the year. And when it comes to filing taxes, Turbo Tax is a great resource. It is updated yearly and will store your previous filing information. If you receive royalties, such as from the oil industry, there are even resources like gas royalty software to help you prepare your taxes. Today's technology makes filing taxes a doable task for the layperson.
by: Art Gib
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