The short answer is yes, it is time to start thinking about getting ready to file your 2018 tax return.
I know. You just were knee-deep into getting things done for 2017.
Whether you are a last minute tax filer or you like to plan ahead, here are some tips to help you stay organized and potentially keep more of your hard-earned money.
First, let’s get organized for next year starting today. Here are three ways to make next year’s tax prep easier:
Second, after creating a system to stay organized, consider adjusting your withholding to “zero in on zero” for 2018. Why and what does this mean?
A tax refund is not necessarily a good thing. After all, a tax refund just means that you overpaid. You “lent” the money to the government and received nothing in return. No interest. No dividend. No thank you note.
The name of the game is to try to get as close to zero as possible. This is where you pay in exactly what you owe. No more. No less. While that is darn near impossible, the point is to not give your money away throughout the year. Reducing your refund could mean larger paychecks each month.
Want more info on this? Click HERE for my tax refund cheat sheet.
Third, consider doing a tax projection for 2018.
You may have already heard that we have a new tax law (yes, that is sarcasm).
We are in a world of the unknown. Professional tax preparers are not even sure how the new law will change your return. Odds are that your overall tax bill will go down but that is not guaranteed. It may be hard, but you should sit down now and prepare a mock 2018 tax return. If you have a tax preparer, get them to do it…pay them to do it. I think it might be worthwhile.
TurboTax has a decent tool but it is only as good as the information that is released by the government. I would not trust a projection tool like this 100% but if you find that a large refund is expected, you can go and adjust your withholding as mentioned above. A projection may save you some work too. If you figure out that itemizing is no longer beneficial for you, you really don’t need to keep up with things like charitable contributions.
The bottom line is that a little preparation and organization throughout the year can save pain and hassle next April. The small but consistent work that you do now can mean hours of time saved down the road!
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