Is it just us, or did this year fly by in the blink of an eye? While we wish that statement felt more hyperbolic, one particular fact makes it all too real — it’s nearly tax time again.
If you’re thinking it seems like you just did you taxes for last year, you aren’t alone. And that perceived brevity makes it easy to put off the coming year’s taxes until the last minute, leaving you stressed out to the max.
To help avoid the haze of last-minute rushing, we reached out to certified public accountant Mark D. Rosenfeld to find out everything you need to be doing now to prepare for taxes. “This is always a great topic at this time of year, but especially relevant now because there are massive changes in the tax law for tax year 2018,” Rosenfeld tells SheKnows.
Here’s what else he had to say about getting your ducks in a row to do your taxes.
Review your records
“Pull out your copy of the 2017 tax return that you filed. This serves as a good reminder of the things that you will need to accumulate in order to prepare your 2018 tax return,” Rosenfeld said.
Can’t find yours? Good thing you’re working ahead! You still have time to reach out to your tax preparer from the previous year to obtain a copy.
Don’t make assumptions
Changes to the federal tax code won’t necessarily affect you for state income tax purposes… yet.
“Many states have yet to conform to federal changes,” explained Rosenfeld. “This means that you may continue to itemize your deductions for state income tax purposes even if you utilize the new larger standard deduction for federal tax purposes.”
Give “bunching” some thought
According to Rosenfeld, it might be shrewd for you to “bunch” you charitable contributions for 2018 and 2019 into one year. Yep, you can do that. Who knew?
“It may make sense to itemize in one year or the other using this technique,” suggested Rosenfeld, noting that this trick can apply to other areas too. “The same strategy can be used for medical expenses and state and local taxes. The trick is to bundle all of your itemized expenses in one year — or the other.”
Double check your withholding
No one likes to find out come April they owe the IRS money. Tax time is really only fun when you get a return, right? This is why Rosenfeld recommends checking your tax withholding with all employers.
“Especially in light of the many tax changes, this is an excellent time to check to make sure your tax withholding is correct. The IRS has built an updated tax withholding calculator on their website. The IRS is reporting that it is being underutilized,” said Rosenfeld.
Update your address
We’ve all been there — we wait until the eleventh hour to file our taxes only to realize we can’t find all of our forms. So use this time to do your due diligence.
Urged Rosenfeld, “Make sure that your current address is correct with anybody that will send you a form W-2 or 1099. Think past employers, banks, brokerage companies or any company that pays you any type of retirement benefit. Doing this now will ensure that you will spend less time later tracking down missing forms that you need to prepare your tax returns.”
Go the extra mile
Tax time is all about records and forms and paperwork, so it makes sense to take advantage of the time to get all your affairs in order — even those that only loosely pertain to taxes.
“Not directly related to taxes but equally if not more important, this is a great time to get copies and review all of your beneficiary designations for your IRA’s, retirement plans like 401(k)s, annuities and insurance policies. In the event of death, these types of accounts pass to heirs through these specific forms and not by will or trust. I regularly see money unintentionally inherited because these forms were not updated for life changes, such as divorce,” revealed Rosenfeld.
While taxes are never fun to take care of, tackling some of these items now will save you a whole lot of stress in the spring.