How to Prep for Next Year Now – It’s More Than Saving Receipts

2018 is half over – are you thinking about next year’s filing? Well, you should be. You already know that most of the hassle is often due to time spent gathering documents, scratching your head to remember deductions, and other administrative paper-flipping. We hope you’ve saved all of those receipts saved electronically since January to avoid this. So what about the bigger picture? Details on what to do besides organize your financial records are below. 2019 you will thank you.

Get tax reform savvy

Major tax reform only happens once every few decades or so, and unsurprisingly, it typically has a large impact on your taxes, or at least how you approach them. We’ve kept you in the loop about the recent passing of tax reform, and you should keep its implications in mind throughout 2018. This is especially true if you own a business or a home, or plan to.

Set financial goals

Many Americans fail to set financial goals, or reflect on financial decisions they made previously and look to improve. Perhaps you have a significant life event planned for 2018 (like a wedding, a child, or a move), and your spending and savings needs to adjust to the changing tides. Start by adding events that affect your finances to a financial planning calendar and budget monthly accordingly.

Reevaluate your withholdings

If you haven’t already, you can change your tax withholding at any time by refilling out your W-4 from your employer. Only do so after you’ve accomplished the above; knowing how taxes will affect you and what’s required to meet your goals is essential to maintaining control of your refund!

Budget for estimated taxes and general finances

Now that you have the above sorted, it’s time to budget for your readjusted financial perspective. If you’re a freelancer, you might have already made first and second quarterly taxes this year, and don’t forget to keep up on budgeting for them. Taking guidance from the prior year’s federal tax return, use Form 1040ES to calculate your estimated taxes. Simply fill this out quarterly to keep in-the-know with the highest accuracy. The next payment dates are June 15th and September 15th for your calendar!

The above tax tips will help you reevaluate and adapt your finances so there are no surprises come tax season; they’re just as important if not more important than keeping track of those pesky receipts, expenses, and other records. 2018 may be in its final half, but these tasks should be considered throughout the year in preparation for the next! To further ensure that you’re set up for success, consult your tax preparer for sage advice.

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