A New Resolution for The End of April

Tax season for the year is over – well for those individuals who filed their returns without an extension.  But that does not mean that for tax preparers, they don’t have to think about income tax preparation until the change of the calendar year.  Your preparer may be involved in preparation of business returns which may not have a calendar year as the tax year, so the due date may occur some time other than April.  Estates may have a fiscal year end rather than a calendar year end.  Individual returns placed on extension will now have a due date of October 15.  So, while many people may think that tax season ends in April, for preparers it may be that they are preparing returns all year long – it is just dependent upon the type of return.  April is the end of tax season primarily for individual returns. 

Now that the tax filing deadline has passed, please don’t adopt the attitude that you don’t need to think about your taxes until next year.  Rather, adopt a new resolution to be better organized to make next year’s tax season easier – not only for yourself but also for your preparer.  Here are a couple of suggestions for you to achieve success in that resolution:

• Be organized. 
• Consider a method, either electronically or manually, where you have files to accumulate information throughout the year. 
  • Create a file for charitable donations in which to put the acknowledgement of your donations. 
  • Create a file for medical deductions for receipts. 
  • Create a general deduction file for any miscellaneous deductions that may or may not be needed. 
  • Create a file for communications you may receive from taxing authorities. 
• Should you close a financial account during the year, put a notation with your tax information that the account was closed and the date.  Better yet, put a copy of the last statement in your tax records for the year.  If you close the account early in the year, it is easy to forget having done so a year later. 
• Spreadsheets are great for keeping information organized.  Perhaps you would rather keep your information on paper rather than electronically, so set up a paper spreadsheet to keep track of expenses.  A great example of how helpful this can be is if you are able to itemize deductions, are you aware that for medical deductions you can take mileage, parking and tolls for visits to medical providers?  If you don’t make a note of it – especially for parking or tolls, you may not think about it next year.  Also, did you put a $20 bill in a boot drive for emergency responders collecting at a red light?  You will most likely forget making that donation next year.  Sorry, but the money given to Girl Scouts for cookies is not deductible because you received the cookies in return!
• Finally, just make a simple checklist for income sources, deductions to be used at the beginning of the year to note receipt of your tax documents, e.g., financial institutions 1099 forms, mortgage interest 1098 form, real estate taxes paid, etc.  Once you can check off the expected items, you can transmit your information to your preparer and be ahead of the last-minute rush in April.

Tags: Taxes