3 Ways to Create Ease This Tax Season

With the New Year ushers in the beginning of tax season. Many people find this season to be stressful. But it does not have to be and you can find ease when it comes to taxes if you approach this time of year with the mindset that your plan is to get prepared.

Creating the intention of getting your affairs in order when it comes to your taxes sets the framework of allowing ease to flow into getting the task done and your returns filed. Here are 3 ways you turn this tax season from a stressful endeavor to one that feels effortless:

Ease Tip #1: Start with What You Have

Take inventory of what you have access to right now start gathering your documents for your taxes. If you have access to your bank statements, credit card statements, payment processors like PayPal, CashApp, Venmo, etc., begin pulling together your activity for the year.

Do the same things for any receipts, paper statements, confirmations, etc. Now is not the time to worry about what is missing. You focus is on gathering the documents you currently have into one place.

For those of you who are more tech-savvy, you can create a folder to scan and download everything you find into one place. Having access to a client portal is another way to start electronically gathering your tax documents because now you already began the process of submitting your documents to your tax professional.

But for those of you who prefer hard-copy records, you can get a physical file folder or a pocket folder to start gathering your tax documents. And if you have a combination of both electronic and physical records, you can either have two gathering systems or scan the physical records into your electronic folder.

 

Ease Tip #2: Use Prior Returns as a Document Checklist

Only you as the taxpayer and/or business owner know your complete financial story. Therefore, if you are a person who have sources of income coming from different activities, your tax return can be a great tool to help you check off if you have all the documents you will need to prepare your tax return. Here is a brief list of ways to use your prior year tax return to create a checklist for things to consider this year:

• The front of the prior year 1040 individual return
  • Did you move since last year? Did you update your address with everyone who would send you a tax document or the Post Office?
  • Access all of your brokerage accounts?
  • Distributions from your retirement accounts since last year?
• Schedule A from the prior year 1040 individual return
  • Did you receive the form 1098 for the mortgage interest for your residence and/or your 2nd property this year?
  • Do you have a list of all your cash contributions?
• Schedule C from the prior year 1040 individual return
  • Received your 1099s? (Remember, you still need to report income even if you didn’t receive one)
  • Mileage logs?
  • Supplies purchase receipts and/or statements?
  • Vendor credit card statements?
  • CashApp/PayPal/Venmo reports and/or print screens of activities?
• Schedule E from the prior year 1040 individual return
  • Did you receive the property manager (if applicable) statement for your rental properties?
  • Did you report all of your royalties income (if applicable) from your book sales on Amazon and/or ?
  • Are you still waiting for your schedule K-1s from your S-corporation and/or partnership activities?

Again, this is not a complete list. However, you can see how glancing through your prior year tax return(s) will start your mind thinking to begin listing what you will need to prepare your current year tax return(s) easily.

Ease Tip #3: Be Patient and Proactive

Historically, most information tax returns such as forms W-2s for wages, most forms 1099s, etc. are due to be sent to you by January 31st. Therefore, especially if sent by postal mail, you might receive some of your initial tax documents until mid-February to March. Others of you might not receive your documents until late September if you are waiting on a schedule K-1 from a partnership or an S-corporation on extension.

Therefore, breathe and give your information time to be delivered to you.

But remember to remain proactive and follow up with the people and places that owe you tax documents during the year so you do not miss your filing deadlines.

Taxes can be effortless if you want them to be, and the best way to make that happen is get help with them. If you want to schedule a consultation today, click here.