Taxes are something that very few people look forward to paying. The process of preparing your tax returns can seem daunting, and crunching so many numbers can give you a headache. More than that, you may stress about the accuracy of your return as well as about the amount of taxes owed to the IRS. By preparing for your 2017 taxes now, you can more easily manage these hassles and concerns. You can take a few easy steps today to help you get ready for the upcoming tax season.
Keep Excellent Records
With several months of 2017 under our belts, now is the time to review your records. All deductions that you claim on your tax return should be well-documented. It may be easier to piece together documentation now for a few months rather than try to hunt down a year’s worth of documents next April. You can gather together relevant tax documents, receipts and more now. Then, you can create an organizational system that helps you to more easily track expenses for the rest of the year. This can save you a substantial amount of time next April, and it can prevent receipts and other documents from getting lost.
Estimate Your Taxes
After you have located all of your relevant tax documents and receipts, you can estimate your tax liability for the following year. One idea is to crunch the numbers yourself by printing out a blank 1040 tax return form. If this sounds too complicated for you, you can also use an online tax estimator. There are several calculators that can complete the tax estimate for you. You can use your current year’s receipts to estimate your taxes thus far in the year. Tax rates, deductions and more change from year to year, so it is important to estimate your taxes well ahead of time each year.
Create a Payment Plan
After you have estimated your taxes due to the IRS on the next tax day, you should take a closer look at your financial situation. You still have ample time to save up a substantial amount of money so that you can pay you taxes due to the IRS out of pocket. For example, you can simply transfer a prorated amount into your savings account so that you have money available when the time comes to pay your tax bill. If you happen to fall short on funds, however, you have a few options. You could request an extension to file through the IRS, or you could set up a payment plan with the IRS. Another idea is to apply for online loans. Short-term loans can give you the extra money you need to pay your taxes on time, and this can help you to avoid getting in hot water with the IRS.
The thought of paying a high tax bill to the IRS next April can loom in the back of your mind for months, resulting in unnecessary stress and anxiety. When you estimate your taxes now and are fully prepared to pay the amount owed to you by the IRS next April, you can ease your stress level in the months to come. Take time to walk through these easy steps to learn how much money you may owe to the IRS next year.