When it comes to tax planning, the way in which most Americans seem to approach it these days is by simply waiting until the next year rolls around, and then starting to work at a furious pace from January to March or even April. However, the more judicious option is the one most people learn when they're young: Slow and steady wins the race.
The more tax planning that can be done over the course of the year, rather than cramming it all into a period of just a few months, the better positioned consumers might be overall to make sure they're ready to file on time, according to a report from the Arizona newspaper Your West Valley. This will allow consumers not only to make sure they have time to double- and even triple-check their filings to ensure they're error-free, but also maximize their savings by researching all the benefits which might be available to them, and get their potential refunds more quickly.
In addition, this can help them to understand the ways in which their liabilities can shift when major life events happen, the report said. For instance, consumers who get married over the course of a year are entitled to file jointly with their new spouse, which may open up tax benefits to which they were previously not entitled. The same is true of having a child, or even buying a home.
What else is important?
Of course, when consumers are taking the time to do this, they should also do all in their power to make sure they're keeping things organized, the report said. For instance, those who keep all their records in one safe place, such as a locked fireproof safe or filing cabinet, will not have to worry if they suffer a theft or fire. Moreover, they will always know where all their important documents should be stored, so they don't have to go hunting months later, when they've forgotten where they put everything.
Consumers should also take the time to seek out a reliable tax professional with whom they can work over the course of the year as well, because this too is often conducive to finding the best possible ways to deal with liabilities and tax breaks alike.
Disclaimer: Tax Lounge is an informational source for industry news and related topics. We take every effort to provide you with the most honest and accurate tax information, but this information should not be a substitute for professional tax advice. Use our office locator to find your local tax office or click here to subscribe to our free newsletter.