Tax Day 2019 has just come and gone. If you waited until the last minute to file your tax return, you must be relieved that you’ve gotten that out of the way. Waiting until the deadline to file can have several negative effects such as stress, inadequate time to negotiate the largest refund possible and even leaving yourself vulnerable to tax identity theft. So instead of repeating the same trend, why not get a head start on next year’s taxes? Here are a few things you can do to help you be prepared to file early while decreasing your chances of becoming a victim of tax identity theft.
Adjust Your Withholdings
Did you receive a large refund or have to pay money to the government this year? If so, you may want to adjust your withholdings. In the event you received a large refund, this generally means that the amount of taxes your employer is withholding is too much. If your employer reduced the amount of withholdings, you would receive a larger check each pay period. The downside would be that you will receive a smaller tax refund next year. You should decide which option is better for you.
If you had to pay money to the government, your employer isn’t withholding enough taxes in your paycheck. For most people, paying a lump sum to the government at tax time is not something you’d prefer to do.
Were you searching for tax documents or receipts when filing your return this year? If you wait until the last minute and misplace a document, this could cause you to have to file an extension or even pay a penalty for missing the deadline. This year, set up an organizational system so that you can keep all of your tax related documents in an easy to find location. However, you want to ensure that you keep this location secured as these are important documents that can be used by a criminal to steal your identity.
Do you feel that you could have received larger deductions on your return if you had saved your receipts? Safely store your receipts for common items such as mileage, business meals or fuel so that you can have exact documentation when tax time comes around.
File Your Return As Early As Possible
The first day you could file your 2018 tax return was January 28, 2019. There are a few major positives to filing your tax return early. First, you will get it out of the way. Second, you will receive your refund earlier. Lastly, the earlier you file your return, the less time criminals have to file a fraudulent return using your information. The number one key to avoiding tax identity theft is filing your tax return as early as possible.
Tax time doesn’t need to be as stressful as some people cause it to be. Get a head start on next year’s taxes and save yourself time, money and stress.