Preparing Your Taxes: Thinking Through Your Needs

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  • Post category:Budgeting
source: kai hendry
source: kai hendry

Regardless of where you are in your tax preparation – unless, of course, you’re done – it’s best to start by asking yourself some questions so that you can get organized before you start!

Tax Preparation Professional or Not?

To be honest, whether you’re using a tax professional or not, I would still encourage you to go through the same steps of organizing your information. Believe it or not, turning over a box of records to a tax professional or accountant does not guarantee that you’ll receive the full refund you’re entitled to, especially if you leave something out of the box! However, how you organize that information may be different depending on who is preparing your taxes.

How Complicated Are Your Finances?

  • Do you own a business?
  • Are you self-employed?
  • Do you have many assets?
  • Did you have an excessive number of medical bills in 2008?
  • Do you have charitable giving to deduct?

There are many, many more questions to ask yourself, and this is one of the things I love about tax preparation software such as Turbo Tax or Tax Act. They ask you almost every imaginable question to be sure you’re not forgetting about a possible deduction.

How Organized Are Your Records?

  • Do you file your records throughout the year so that all you have to do is pull out the files and record the numbers?
  • Do your files consist of one big box of papers that you need to sort through before you can get started?
  • Have you received all of your end-of-the-year statements from employers, banks, etc.?
  • Are there additional records you need to request?

The goal here is just to get you thinking about your taxes.

Putting it off, despite being the easiest answer for now, doesn’t actually make the process any easier, and it can lead to a lot more stress later on. So pull out that box of papers or your organized files and set them where you can’t ignore them. Let’s get a head start on those taxes this week!

Which area of tax preparation causes you the most stress? What part are your dreading? What’s keeping you from getting started today?