How can we start prepping for next year’s tax season? We know, we know… this tax season just ended, right? How are we supposed to already be thinking about next year? Well, prepping now could save you time – and money – later. Prepare now, pay on-time, and a little bit more stress-free, too!
Tips on how to prepare for next tax season:
1. Sign up for healthcare
Did you pay a penalty for not having healthcare in 2016? If so, be sure to sign up for healthcare as soon as possible. The penalty for next year will remain the same – up to $695 per adult or 2.5% of your income, whichever is larger. For a family of four, the penalty is up to $2,085, adjusted for inflation.
2. Think about reviewing your W-4 withholding
We all like a big-old tax refund, but based on how much you got back this year, it may be in your best interest to re-consider how much is withheld from your paycheck. To adjust what is withheld and update your W-4, you would need to re-file it with your business’ payroll department.
3. Make charitable donations before December 31st
By contributing to charity or donating goods before the end of the year, you can reduce your tax liability when you file next year. Be sure to keep track and value your charitable giving to keep accurate records. This will help save you time when you file next year. For more information about charitable donating, check out our blog post here.
4. Stay organized
It can be easy to forget about keeping up-to-date records as the year goes on, but we are kindly reminding you to stay organized for next year. Start a folder of important documents and financial records, if you don’t already have one. If you’re self-employed, be sure to track your mileage and expenses that can be deducted. View our two blog posts that will help you know how to track your mileage and identify which business expenses can be deducted.
Get ready now so you can be ready later.