Five Tips to Make Tax Time Easier for You Next Year

tax planning Jul 11, 2019

Five Tips to Make Tax Time Easier for You Next Year

It is only July, so why should you be thinking about filing your taxes? You have at least nine more months before you need to worry about that. However, if you find that April is always a terribly anxious and frustrating month for you, maybe you should consider working on your taxes now instead of waiting until next year. By taking a few easy steps this year, you can make next year much easier and much less painful. You may also save some money by discovering a few extra tax deductions that might be forgotten if you wait until next year to begin working on your taxes.

Five Tips to Make Filing Your Tax Returns Easier

  1. Choose an Accounting Software and Use It

This tip is a two-part tip. First, choose an accounting software that meets your needs. Research the various options to determine which accounting software has the features that will benefit you the most. Companies that you may want to look at include Zoho Books, FreshBooks, Intuit QuickBooks, Wave, Kashoo, and Xero. Second, you must use the accounting software. It does not do you any good to have the software unless you use it. Using the software forces you to maintain current records, which makes tax time much easier.

  1. Keep Documentation in One Location

Choose to keep your records in hard copy or digital format. Blending the two methods just creates more work when you need to find a document. If you choose hard copies, make file folders for specific categories and file documents at least once a week. For digital files, purchase a scanner and upload documents at least once a week.

  1. Keep Personal and Business Separate

It can be easier for small business owners to use one account for personal and business records. However, combining your personal and business records can make it much more difficult to prepare your tax returns. Furthermore, you could lose some of the important deductions and business expenses that you may be entitled to receive by blending your finances.

  1. Document Major Life Changes

Many big life events have tax consequences, such as buying or selling real estate, birth or adoption of a child, marriage, divorce, starting a new business, closing a business, or retirement. As you experience each major life event, document the financial aspects related to the event in a separate file folder. You may be entitled to tax deductions for some of the expenses when you prepare your tax returns.

  1. Consult a Michigan Financial Advisor

A financial advisor can answer many of the questions you may have regarding your tax matters. Working with a financial advisor during the year can help avoid some of the errors that could result in an increase in your tax liability or increase your risk of a tax audit. Tax planning is also a key component of retirement planning and estate planning.

The CJ Berry Group assists clients with comprehensive financial planning, including matters related to taxes, retirement planning, estate planning, Social Security, and long-term care planning. We can help you develop a comprehensive plan that protects you, your family, and your assets now and in the future.

If you have questions, call (844) 885-4200 to speak with a knowledgeable representative.

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