No matter when or how you file taxes before the deadline of April 15, you can take steps to figure out and organize what you need so you’re ready to finish this important financial task.
Quick takeaways
- Take time throughout the year to organize and save tax-related records; it’ll help you reduce the stress of filing your taxes.
- You can file your taxes on your own or use a tax advisor to help guide you through the process.
- After completing your tax return, it’s time to think about what’s next—whether you receive a tax refund or owe taxes.
Some people prep their tax returns and e-file the minute they’re able to hit “send.” Still others wait until the last minute and prefer old-fashioned paper returns. Whatever suits you best, you can take steps now to assemble and organize what you need to file your taxes so you can finish this important to-do when it works for you.
What the IRS requires to complete your tax return generally doesn’t change. What may be different is new-to-you forms—for example, if you are a beneficiary to an estate or make a withdrawal from a retirement savings account, you’ll receive a form to report those proceeds.
In addition to key documents, you’ll also need some personal details. If you use the same tax advisor from year to year, they likely have this information. If not, you’ll have to provide the specifics to whoever you’re working with. Documents and details include:
- W-2s (employers or contracting companies will e-deliver or mail by January 31)
- Social Security numbers for you, your spouse, and dependents
- Last year’s federal and state tax returns
- Bank statements from this year
- Mortgage interest statement from this year
- 1099 forms (must be e-delivered or mailed by January 31)
- Charitable donations (monetary or in-kind) from the tax year
- Information on any eligible tax credits or deductions
Around January 31, you’ll start to receive some tax-related forms, such as W-2s, either through the mail or email. But tax information may also accumulate through the year—for example, a receipt from a donation you make in June. You must decide which items are relevant to taxes, and how to track both the amount and the receipt.
Look for a storage method you’ll use from year to year. Maybe you prefer quickly scanning receipts and tucking them into cloud-based folders organized by type of expenditure. Or, perhaps you organize physical copies each month when you pay your bills. The point is to pick what you like, not what works for someone else.
You have several options.
- Prepare your return yourself; 46% of all filers
- Work with a tax preparer.
Once you’ve filed your taxes, there are two things to consider for next year’s financial planning goals.
- If you consistently receive a big refund, consider adjusting your withholdings so that you receive more of each paycheck.
- If you regularly have a tax bill, think about how you’ll pay for it. And, consider adjusting your withholdings to set more aside throughout the year, too.
The temptation to spend any refund is strong—and that’s OK. But if you can put some or even all of a refund to work, you may be able to accomplish longer-term goals such as:
Beyond your withholding decisions, you can also review what happened in your life, or what will happen next year, that might demand a rethink in your tax strategies. For example, are you retiring? Paying off your mortgage? Did you experience divorce or death in your family? All of these have an impact. Consult your tax advisor before you make any final decisions.
The amount you contribute to a retirement account you have through your employer is pre-tax, which means it lowers your taxable income. Do you want to boost what you’re saving? Log in to principal.com.
