03 Jan When Should You Start Gathering Your Tax Documents?
With a New Year upon us, it’s time to start thinking about filing your tax return. But tax season isn’t until April, right? In reality, tax season officially begins on January 24th this year, and it can be beneficial to start gathering your tax documents even sooner. Keep reading to learn which documents you should start collecting and when to begin collecting them.
When to Gather Your Tax Forms
Your official tax forms likely won’t start arriving until after the official start of tax season. This is when your employers and contracted clients will begin sending you your W-2s and 1099s. Depending on your exact financial situation, you may see a variety of other IRS tax forms arriving throughout late January and February. Some parties may provide the option of receiving these forms electronically, which often gets them delivered to you more quickly and can give you a head start on gathering your tax forms.
Aside from opting into electronic delivery, there’s not much you can do to gather your official tax forms faster. However, it’s a good idea to come up with a list of which tax forms you should be receiving so that you know when you’re ready to move forward with filing your return. Then, begin collecting your tax forms as soon as they’re delivered to you. Collect them in a folder until you’ve received every form on your list, or deliver them to your CPA as you receive them.
Note that some IRS tax forms, such as K-1s, may not be delivered to you until mid-March. If you’re anticipating a tax form that is typically delivered late in the tax season, you may want to consider filing for an extension to ensure that all of your income is properly accounted for before filing.
When to Gather Your Financial Information
Unlike your IRS tax forms, you have a bit more control of your basic financial information and when you can start to collecting that data—and the best time to start working on it is as soon as possible. First, make sure you know what financial statements you’ll need. Depending on your circumstances, and whether or not you intend to itemize your deductions, this may include documents like:
- Donation receipts
- Mortgage statements
- Rental income records
- Medical expense records
- Proof of home purchase
- Records of miles driven for business purposes
- Receipts for deductible business expenses
- Personal identifying information
If you’re not sure which financial documents you’ll need to file your tax return, contact our tax preparers in Provo. We’ll go over the details of your individual financial circumstances to determine which documents you should begin collecting so that you’re ready to file your return.
The Benefits of Filing Early
Why should you start working on collecting those forms so early in the year? Why not wait until it’s closer to the tax deadline? There are actually many benefits to filing your taxes sooner, rather than later, including the following:
- Get your tax return processed more quickly, and get that tax refund (if you’re expecting one) in your account even sooner.
- Protect your refund from tax scammers. These criminals try to file a false return in your name early on in the season and collect a refund on your behalf, leaving you with a big mess to clean up when you file. If you get your return filed first, their fraudulent return is the one that will be rejected, not yours.
- Give yourself time to plan for your tax bill. If you’re expecting to owe on your taxes, filing early doesn’t mean you’ll have to pay sooner; you’ll still have until the tax deadline to pay. However, filing early gives you the official amount that you’ll owe on tax day, so you have some time to gather the funds to pay it. That’s a much better situation to find yourself in than filing a week before the deadline and finding out you owe more than you can afford.
- Get more access to your CPA. It’s no secret that tax season is busy for us, and the closer it is to the deadline, the busier it gets. The earlier you file, the more time we’ll have to sit down with you and consult with you one on one regarding your taxes.
If you’re ready to get to work on your taxes so you can file early, contact The Accounting Guys today. Our experienced tax preparers in Provo can help you collect and organize your documents, and file your individual or business return on time. Call now to schedule a consultation with one of our CPAs.