The end of the year is almost here, and that can mean only one thing. Before you know it, tax filing season will be upon you, and if you are not ready, you could end up spending more time, and money, than you have to.
The good news it is not too late to get a handle on your taxes. There is still time to get your receipts organized, your tax filing software updated and those last-minute retirement plan contributions made. Here are 10 timely pre-tax season tips to save you money and time.
- Review your tax return from last year. If you want to know where you stand this year, you need to see where you have been. Now is the time to review your past year’s tax return, so you can be ready for the filing season to come.
- Check for updates on your tax filing software. If you used tax filing software last year, now is the time to look for updates. You want to make sure you are working with the latest version, so go online and check for updates.
- Read your year-end statements. You do not have to wait for the first 1099 forms to arrive; you can get a sneak peak by checking out your year-end brokerage statements and banking information.
- Watch out for special sales on tax filing software. Whether you are sticking with your favorite tax filing software or trying something new, every penny counts. As tax filing season approaches, many software companies run sales on their tax filing programs, and you could save a bundle.
- Gather, and scan, your receipts. If your receipts are living in a shoebox under the bed, now is the time to bring them into the light. While you are reviewing those receipts, take a few minutes to scan them into your computer – it will save you lots of time and effort later.
- Harvest tax losses to offset gains. If you have big capital gains in your portfolio, look for losers in your portfolio that could offset them and save you money. Selling now could limit your losses later – and save you a ton on taxes.
- Review your retirement plan contributions. The end of the year is the perfect time to see how much you have contributed to your retirement plans – and how much more you can put in. Every dollar you contribute could reduce your taxes while helping you save for the future.
- Open, or contribute to, a health savings account. If you have not already done so, consider opening or contributing to a health savings account. If you have a high-deductible health plan, contributing to a health savings account could reduce your tax bill and help you prepare for the unexpected.
- Revisit your 401(k) or 403(b) plan contribution. If you contribute to your retirement plan at work, the end of the year is the perfect time to look at your contribution percentage. Adding more in the year to come could reduce your tax bill and help you save money.
- Consider adjusting your withholding. If you are expecting a big tax refund this year, you might want to adjust your withholding for the year to come. You might end up with a smaller refund next year, but you will also enjoy a fatter paycheck month after month.
The end of the year is the perfect time to get a handle on your taxes. The steps you take in the waning days of the current year could save you time now – and lots of money later.