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5 Easy Tips for Smoother Tax Prep

If you haven’t done your taxes yet, you’re not alone. According to the Internal Revenue Service, they receive a majority of Americans’ returns the week taxes are due. After having extra time to do taxes in 2020, Tax Day this year is once again on April 15. If you are feeling overwhelmed by the thought of tax prep, or simply have no idea how to start getting organized, these tips will help.    woman looking stressed about doing her tax prep

Set Goals and Break Down Tasks

Large projects are always easier to handle when you break them down into manageable chunks. Rather than looking at ‘doing taxes’ as one overwhelming job, break it down into smaller tasks that are easier to complete. Give yourself a day or two between tasks to regroup and get ready for the next thing.

Focus and Avoid Distractions

We have been conditioned to believe that multi-tasking is the key to being productive. But more and more, studies show that it can actually make us less efficient and produce higher levels of stress than focusing on and completing a single task at a time. Above all, tax prep takes focus. Set aside time specifically devoted to those tasks and eliminate distractions. You’ll accomplish your goals more quickly and be less likely to overlook details and make mistakes when you’re focused.

Gather All Information

The key to getting your taxes done accurately is having all the necessary information and paperwork together and organized. While each person’s paperwork will vary depending on their unique situation, every filer will need the following basic information to get started:

  • Social Security numbers and dates of birth for yourself, as well as your spouse and dependents (if applicable)
  • Copy of last year’s tax return
  • Bank account and routing numbers
  • Your electronic filing PIN
  • All statements relating to earned income, such as W2 and 1099 forms and records related to investment, rental and retirement income
  • Receipts for charity donations, medical expenses, HAS contributions, etc.
  • Interest paid on mortgages
  • Interest earned on savings accounts

Talk with your tax preparer or review a complete list of necessary documents included with your tax prep software for a comprehensive list. Once you know what you need, keep the list handy so you can refer to it frequently and collect the paperwork you need throughout the year to get a head start on next year’s return.

Allow Enough Time for Tax Prep

Once you have all your information together, it’s time to actually do your taxes and file your return. Be sure to allow enough time to have them prepared and filed before the deadline. With most people waiting until the last minute, you could find yourself unable to get an appointment, or may find online-based tax preparation software overloaded if you wait until the day before. Plus, you never know if you’ll run into a glitch that could set you back. Better to give yourself some wiggle room so you’re sure to file on time.

Don’t Spend Refund Before You Have It

You’ve heard the expression that says there are only two sure things in life: death and taxes. But what is not guaranteed is that you’ll be getting a tax refund. Even if you regularly receive a refund, changes in your income and circumstances, along with differences in the tax code, could mean you’re not getting one this year. As tempting as it might be to overspend thinking you’ll make up for it with a refund, resist that temptation. And if you do receive one, consider these ideas for how to make the most of it.

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