6 Ways to Get Organized Now to Make Tax Time Easier

Tax Planning Stocksy_txpe81059882Gh000_Small_719072

The holiday season is officially here, but can you guess what comes after the holiday decorations are put away? That’s right, tax time. You may not want to deal with taxes until the new year, but honestly, this is a great time to get organized and garner some last-minute tax deductions to boot. Here are ways to do just that.

  1. Gather your documents into one place. Picture this: when you get ready to prepare your tax return, you open a folder and everything you need to file your tax return is there. Here’s a simple way to make that happen. Prepare a file and label it Current Tax Info, and tuck it into your desk drawer. Then go through your accumulated papers, and every time you see something that’s tax-deductible, drop it into the file. Sorting the data into categories at the end of the year will be much easier if it’s all in one place.
  2. Remember what you did last year.  What you do in your day-to-day life can be worth valuable tax deductions.  Don’t forget to gather your receipts for things like job search expenses, moving expenses if you moved for another job, un-reimbursed employee expenses, child care, and your charitable donations which may be tax deductible.
  3. Get a social security number for your new baby.  New babies bring so much joy.  They also bring valuable tax deductions and credits like the dependent exemption, child tax credit, and the Earned Income Tax Credit, but you need your new baby’s social security number in order to get tax deductions and credits for them when you file your taxes.  If you just had a baby make sure you apply for a social security number with the Social Security Administration.
  4. Clean out your closets. As you put away the summer clothes, take a critical look at your closet. Are there things that you never wear, are outdated or no longer fit? Don’t pack them away for next spring, give them to charity now. That way someone else will enjoy them and you’ll get a big tax deduction for 2016. You can easily value and track these donations using TurboTax ItsDeductible.
  5. Review your W-4 withholding. Did your income change this year? You may want to think about adjusting your withholding before the end of the year and have the appropriate amount taken out. Withholding is the tax your employer takes from your pay each check. To update it, simply re-file your W-4 form with your payroll department. You can choose to update it whenever you want throughout the year and TurboTax has a W-4 calculator to help you estimate your withholding allowances.
  6.  Consider a new car. Ohhh, that sounds like fun! With interest rates at historic lows and auto dealerships anxious to make a sale, the fall is an ideal time to shop. If the dealer won’t give you much for your car, consider donating it to charity. That way, you’ll save money operating your more efficient new vehicle and also get a sizable tax deduction for your old clunker.

At tax-time, don’t worry about knowing tax deductions or credits.  TurboTax will ask you simple questions about you and give you the tax deductions and credits you deserve based on your answers.

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