No one likes the stress of tax season, but what if we told you there’s a way to ease some of that stress?
The key is to plan ahead, so you’re not rushing at the last minute to get organized. And if that’s not motivation enough, planning ahead and submitting your return early means you can enjoy your tax refund that much sooner!
Here are six ways you can prepare and make tax season a breeze.
1. Create a tax return file.
One of the hardest parts of tax season is finding all the paperwork. So, your first step should be to create a file where you can store all the necessary documents as they arrive. Be sure to keep the file in a place that’s easily accessible, otherwise it’ll be tempting to procrastinate filing your paperwork when it comes in the mail.
2. Dust off your 2017 tax return.
Start hunting down your 2017 tax return, and add it to your file. When filing this year’s taxes, you’ll be asked for last year’s Adjusted Gross Income. Now you’ll have it at your fingertips!
3. Add your W-2s to the file.
As you begin receiving tax forms in the mail from your employer(s), waste no time. Immediately put them into your tax return file, so they don’t get misplaced or buried under other mail. Putting them aside right away will save you time later.
Typically, you’ll start receiving tax forms in January. Keep an eye on the mail for these forms in particular:
- W-2s or 1099s from employers
- 1099s from banks
- Forms 1098-T or 1098-E (if you have student loans)
- Records of scholarships or fellowships (if applicable)
- Form 1095-A (if you’re claiming a Premium Tax Credit)
As always, look over the forms when they arrive. If anything doesn’t look right, get in touch with the sender right away.
4. Begin tracking down your receipts.
If you have qualifying expenses to write off your tax return, begin tracking down the receipts now. (While you’re at it, start a system for keeping track of those receipts all year long. This way, you won’t need to track them down next year; you’ll know exactly where they are!)
5. Start researching tax credits.
Did you know you could be eligible for all sorts of tax credits?! Here are a few resources that can help you find out if you qualify:
- 7 Tax Credits & Deductions to Get You a Bigger Tax Refund
- Things You Need to Know About the Earned Income Tax Credit (EITC)
- How to Get a Fast Tax Refund
- 3 Tips to Make Sure You Get the Earned Income Tax Credit
6. Make a plan for your refund.
If you expect to receive a tax refund this year, there are two ways you’ll want to prepare for it.
First, decide how you want to receive it. With direct deposit, you could receive the refund days or even weeks before you would receive a traditional check. Best of all, you don’t even need a bank account—with a registered Green Dot Prepaid Visa® Card you can set up direct deposit and have your tax refund loaded straight to your card.
Second, we all know how easy it is to spend that money right away. Instead, think about how you can use it wisely and reach your financial goals. Set some new goals for 2018 (see our article featuring 4 reasons to set financial goals) and decide how much of your refund will go towards helping you reach those dreams, how much will go towards paying off debt, and how much will go towards treating yourself right now—because all three of those are important.
With these six tips, you’ll be well on your way to a stress-free tax season.