Q: It seems every year that I am scrambling to gather all my information and get my taxes filed. How do I get ahead of the game to make the process easier next year?

A: You are not alone. Tax time can be very stressful, and many people find that despite their best intentions, they are scrambling to find all the relevant information and get their tax preparation done in the allotted time. Like most things in life though, this stress can be alleviated by starting early. A little bit of extra effort this year will reap great rewards during the next tax season. Here are some easy tips to get a head start on next year’s taxes:

Organize Prior Year Returns

With a few exceptions, you should be able to destroy anything over 4 years. (For more information on this, visit https://www.irs.gov/taxtopics/tc305). You should maintain 3 years’ worth of tax returns along with receipts and supporting documents. If you are a paper person, save the documents in a fire safe box, organized by year. As a new return cycles in, shred the oldest. If you are comfortable with computers, and more importantly, cloud-based storage, consider going paperless. Most accountants will send you your return in a pdf and if not, you can scan it. Create a folder for Tax Returns in whatever online storage application you use and organize it by year. Save prior year returns along with the confirmation from the IRS that returns were filed. For added security, add a password to safeguard these documents.

Change Tax Withholdings

Consider adjusting your tax withholding if you either had a larger tax payment due than you are comfortable with or if you received a large refund. The IRS has a great tax withholding calculator that can help: https://apps.irs.gov/app/withholdingcalculator/

Get Organized

Create a System to Organize your tax information for the current year

• If you are a paper person:
  • Use an Accordion File
    • Create folders and as you receive information or receipts, organize them accordingly
      • Income
      • Investments
      • Deductions
      • Receipts
      • Business/Real Estate
      • Miscellaneous
• If you are a digital person:
  • Create a system of folders in a secure location, preferably cloud-based
    • Scan and save receipts as they come in throughout the year
    • Consider using Quicken or Mint.com to organize and categorize your spending throughout the year. This will make it very easy to access

Do Some Tax Planning

Perhaps there were areas where you could have gotten more deductions or credits. Careful planning now can help you to minimize your tax liability and avoid the scramble at the end of the year. Ask your accountant, if applicable, to keep an eye on what you can do to improve your tax situation in subsequent years.

Safeguard Your Information

Last but not least, whatever you choose to do, be certain that you are securely maintaining your tax information. Nothing seems to bring out scams, hacks, and identity theft quite like tax season.

• Regardless of whether you are storing your documents at home or online, be certain that they are secure and in a safe location
• Use unique passwords and update them regularly
• Be sure to only open attachments and links from verified and trusted sources and never give anyone your social security number over the phone