As the holiday season continues, you might be tempted to put off your taxes until the second week of January. However, the holiday season is a crucial time for you to get some last-minute tax deductions in with the right organizational skills. Here are some of the best tips on how you can be prepared and organized for the tax season.
Collect Your Documents Early and File Them
Imagine that when you go to file your taxes, all your information is readily available in one file? Well, you can make that happen this tax season by organizing your information early. Go through your records and place them into a file folder with multiple compartments in it. Label the file with “tax information”.
Comb through your records and divide the files into different compartments. For example, you place all your W-2 forms into one compartment for easy access. Another one could hold your tax deductions for the year. This way, you know in advance all the allowed tax deductions you have for the year. The more elaborate your taxes, the more files and information you’ll need to show.
Consider the Entire Year
It’s important to think about the entire past year. Think about anything that could be tax deductible in your day-to-day life. Also, make sure that you take bigger events into consideration such as job-related moving expenses, expenses related to your job search, any fees unpaid by your employer for your job, child care for when you’re working, and any potential charitable fund donations. These are tax deductible expenses.
Get an SSN for Your Newborn
As you are experiencing parenthood for the first time, or as a reoccurring parent, you’ll be able to enjoy tax credits as well. Most parents put off getting a social security number and birth certificate for their child until almost a year later. However, you could be missing very substantial tax deductions.
Be sure to apply for a social security number with the Social Security Administrators’ Office to get the full benefits of your child-related tax deductions.
Donate to Charities
As you go through your closet, be sure to keep all the unwanted things instead of throwing them away. These clothes can be donated to charity. Plus, you get a tax deduction for a charitable donation. It’s one of the easiest and fastest ways most people can get tax deductions for it without donating money.
Always Review Over Your W-4 Withholdings
If you have a withholding being taken out, you may want to think about checking it every year. This is especially true if you have recently switched incomes between the year. If you’re making more money or less money, you’ll want your withholdings changed to reflect the amount necessary. Otherwise, you could wind up owing money.
Maybe It’s Time for a New Car
If you’ve been contemplating getting a new car, now is the time to do it. Not only are interest rates lower in fall and early winter, but they are also a sizable tax deduction if you donate your old car to charity. This is a clear solution where everyone benefits if you’re in the market for a new car.
Use These Tips
Use these tips to guide you through your tax deductions. You’ll be prepared for tax season in no time at all.
With TurboTax Online, you can expect the guided interface to help you throughout the entire process. There is literally no need for you to know about the complicated parts of taxes. They import your W2 information, ask you simple questions and based on your answers they guide you in filling out the correct tax forms, so your return is accurate.