Tax Season: How to Prepare

We all love the Good Ole' US of A, but I'm not sure who (if anyone) loves Tax Season. This was the first year that I owed the government money, and boy, I was not happy about it. Let's just say there is much less of an incentive to file early when you owe a big chunk of money to the Hill. I love #DC, but I love my #money more.

So how can you prepare for tax season, submit your taxes, and (hopefully) increase your deductions along the way? Take a look at my steps below, not just in April, but all year long, to maximize your potential, and stay sane along the way:

1. Start Early: This one is a little bit of a no brainer, but is sometimes, even by the best of planners, forgotten. Organize your files so that all your charitable contribution receipts are in one area. Itemizing your things? Create a centralized #Excel document that includes the item, the 'thrift store value' (essentially 25% of what you purchased it for if the item remains in good condition), the date donated, and the charity. Make sure to donate all of your items by December 31st. Better yet, donate throughout the year to keep your closets clean. I try to the live by the "one in one out rule" so when I buy something, another item needs to be retired. You'll feel better about yourself for so many reasons - more lifted, less heavy, and giving back! What could be better?

2. Stay Organized: Another easy one, but make sure you save, print, etc. all your documents as you receive them in January and February. File them away in that folder you created above (hard copy or digital, you choose) and keep a mental (or written) checklist to make sure you received all your documents. The number of documents received will depend on how many places you store your money (diversity is key!) but make sure nothing is forgotten.

3. Prioritize: Start small, or plan to knock it all out in one day. In my younger years, I opted to come into the office on a Sunday to do my taxes. I did this for a few reasons. First, I was able to look across multiple screens - this was clutch as I did not have to print out all of my documents. Second, I had every incentive to move as quickly, yet thoughtfully, through my taxes as possible. No dog, TV, or humans to distract me - I wanted to get in and get out. If anyone has ever had to work on the weekend in the office, you can understand my point here.

4. Do Your Research: Your goal is to minimize your taxable income. If you make less than ~$72K annually, you may qualify to open an IRA which you can use as a deduction. Amp up those charitable contributions to feel good and give back, but also, increase your deductions. Take advantage of your state's 529 for school savings. Fun fact: you can use a 529 account on your own education, as well as your child's. Even if you're not planning to have kids, or do not have them yet, you can still save and give as a gift to a family member or friend. 529 deductions only count towards your state tax filing, not federal.

5. Start Early (Round 2): Get those taxes done - pronto! Use #TurboTax or another online tax software to get those numbers ticked, tied, and filed! Nothing is worse than realizing it is April and you have not started yet. Get on it!!

Take Care,

AA

Enjoying a run with the Cherry Blossoms

#Beprepared #Taxes2018 #Newtaxlaws

Note: The ideas above are strictly my own, and should not be taken as any sort of financial or investment advice. I am not a licensed financial planner, and these ideas do not guarantee any sort of return (or loss) in today's marketplace. Thank you!