Get Tax Ready for 2008

The taxman has come and gone, and no one is all that sad to see him leave. However painful his recent visit might have been, you'll want to start getting ready for the next time he comes around. A little upfront planning can make your next April 15th a much more pleasant experience.

After April 15th, the only thing a taxpayer wants to do is forget about taxes. Considering all the work it takes to organize materials for a return, this reaction is understandable. However, there are ways to make filing a much easier process, provided that you start sooner than later.

Revamp your filing procedures

One of the biggest headaches is organizing your records. If you wait until the last minute, you'll get frustrated and confused trying to gather your materials. To make the process less painful, start organizing today. Create a filing system, separating expenses, W-2 forms, receipts from charitable donations, etc. Stick to this system, and file the materials the moment you receive them. When it comes time to present the paperwork to your accountant, or use them to complete your own return, you'll be ready to go.

Evaluate your procedures

Do you file a return on your own using tax software? Or do you employ the services of an accountant? This is a good time to sit back and weigh the pros and cons of both approaches. If you're happy with completing your own returns, take a look at different kinds of software. There may be a better solution on the market. If you like using an accountant, you may want to compare prices from other tax preparation specialists to ensure that you're getting the best value for your money.

Understand your deductions

Now that the dust has settled from your current filing, review possible deductions. Your accountant can answer this question, or there are plenty of online materials, including the IRS's own website, that can clarify any issue.

The standard deductions include exemptions for children, charitable donations, tax preparation costs, job expenses (if you own your own business), and interest on your mortgage payment. The deductions that you can claim will depend on your current financial status.

Review your return

With the recent filing of your tax return still fresh in your mind, review the details to plan your taxes for the next year. Make sure that you're withholding enough to cover the tax bill. Are you planning any significant jumps in income? If so, you'll want to take financial measures to prepare for the additional tax burden.

Besides the obvious monetary bloodletting, taxes are despised because of the amount of filing and preparation it takes to complete a return. Like any task, the pain can be mitigated with solid upfront planning, and the discipline to stay organized. Create a system and stick to it, and April 15th will become a much more pleasant day, with many happy returns.

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