The speed of modern life can make your days feel hectic. Between school drop offs, deadlines, and getting dinner on the table, taxes are the furthest thing from your mind. Until the deadline that is.
We get it, you have a lot on your plate. It’s tempting to wait until the last minute when it comes to taxes. But doing some year-round planning can actually relieve pressure. And when you work with a trusted Roanoke CPA firm, planning doesn’t have to be stressful at all. In this article, we cover how to plan and the ways year-round tax planning can boost your financial well-being and make tax-time easier.
How to Plan for Taxes Year-Round
Planning for your taxes year-round may seem intimidating, but it doesn’t have to be. Setting up good habits will make tax planning a breeze. And, having professional tax services on your side means you’ll always have someone to go to for advice if you get stuck. Here are some top tips from our Roanoke CPAs for year-round tax planning.
- Maintain Detailed Records: Don’t keep your receipts and paystubs in a shoebox. It’s important to know how much money you’ve earned and how much you’ve spent on items that are eligible for deductions. Take advantage of technology: there is software that track and organize your finances automatically and apps that help you track deductible expenses.
- Adjust Your Withholding and Estimated Payments: If you’re employed, be sure to review your tax withholding to ensure that the amount being withheld aligns with your projected amount owed. If you’re self-employed, it’s a good idea to pay estimated quarterly taxes to avoid huge and surprising bills at tax time.
- Maximize Tax-Advantaged Accounts: When it comes to taxes, tax advantaged accounts like IRAs, 401(k)s and Health Savings Accounts (HSAs) are your friend. If you can, it’s excellent practice to max out your contributions to these accounts as it helps you save for the future and lowers your taxable income.
- Keep Records of Deductions & Credits: Keep track of your donations to qualified charities, money you spend on your business and any education expenses. These can all qualify for deductions and it’s important to know how much you could claim.
- Prepare for Filing Early: This tip will make tax time so much less stressful: Know what tax documents you’ll receive and begin gathering and organizing them as soon as you receive them. Once you’ve received all your documents, you can file taxes. The sooner the better because then it’s off your plate.
- Schedule Quarterly Reviews: We all need a little help sometimes. It’s a good idea to sit down with your tax advisor on a quarterly basis so you can review your financials and stay on track.
Advantages of Year-Round Tax Planning
Year-round tax planning offers a host of advantages. With a little bit of planning, you can ease tax-time and financial stress. It helps you banish uncertainty around what deductions you’re eligible for and how much you might owe. Here’s some of our favorite benefits of year-round tax planning:
- Strategic financial planning: You’ll have a great picture of your financial health now and strong projections about your future financial state.
- Maximizing deductions: Stop guessing about whether you took the maximum deduction. When you plan, you’ll know!
- Avoiding last-Minute stress: Tax time stress will be a thing of the past. You can file quickly and efficiently because your ducks are in a row.
- Investment and retirement planning: Tax planning can double as financial planning. If you’re maximizing your tax-advantaged retirement accounts, your golden years might look bright!
- Proactive risk management to avoid tax-related risks like audits: When you keep good records, your chance of being audited is low. And in the event that you are audited, you’ll be prepared with excellent records!
- Financial education to make informed decisions: Year-round tax planning keeps you on top of your financial situation. So, when you have a big decision to make you can make it with firm data!
Contact Neely’s for Year-Round Tax Support
Our friendly, Roanoke CPAs have helped Roanoke tax payers since 2007. With Neely’s you’ll get customized solutions for your unique financial circumstances including help with year-round tax planning! If you’re ready to take the stress out of tax-time but need some help, contact us!