Steps to Get Ready to File Your Tax Return

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December 13, 2018 • Block Advisors

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While holiday shopping may be on your mind, there are last-minute things you can do as the end of  approaches to get ready to file your tax return.

Make sure your filing experience goes smoothly next year by planning ahead now. Taking these steps will also help them avoid surprises when you file next year. Here are six key tips to get ready to file your tax return:

1 – Do a W-4 Checkup

The Form W-4 determines how much federal income tax your employer withholds from every paycheck. Depending on your marital status and the number of allowances you select, you’ll have more or less tax withheld from each paycheck.

At this point, while it may be too late to do much with your 2019 withholding, it’s still a good idea to try to avoid surprises by doing a Paycheck Checkup. This will help you decide if you need to adjust your withholding for the last few paychecks if possible, or to make an estimated tax payment.

2 – Start Gathering Tax Documents

To file an accurate tax return, one of the must-dos is to have all necessary tax and financial documents in place before you file a return. While it may seem early, gather tax and financial statements, contributions and other deduction information, and prior-year tax returns so you can start thinking about filing your taxes.

3 – Confirm Your Mailing Address

Have you moved in the past year? If so, notify the IRS of your changed address. In addition, confirm that each employer, financial institution, or other payers have your current mailing address. While it’s last minute, it will save you the hassle of dealing with the change of address when it comes time to file. In January, you will start receiving year-end forms like your W-2 from employers, 1099s from banks and other payers, and 1095-As from the Healthcare Marketplace, so you want to make sure these important forms go to the right place.

4 – Get Educated on Tax Reform Changes

The Tax Cuts and Jobs Act overhauled many tax laws affecting income, credits, and deductions. Alternative Minimum Tax, the Child Tax Credit, Bonus Depreciation, and Gift Tax are just a few of the many impacted tax laws that changed.

As the year ends, you may want to think about brushing up on the changes so you can have the best tax outcome. For the best guidance, find an experienced tax advisor who can walk you through the financial impacts of these changes based on your unique situation.

5 – Contribute to Charities

If you donate cash or property to charities by year-end, and you expect to itemize deductions you can deduct the contributions on your tax return. Just remember to keep a bank record (such as a cancelled check) or get a receipt from the charitable organization you’re donating to. For cash contributions of $250 or more you must have written acknowledgment from the charity.

6 – Spend Your FSA Funds

Flexible spending accounts (FSAs) cover common medical or dependent care costs. With these accounts, if you don’t use all your FSA funds by the end of the year, you could lose the rest.

If you have extra money in a health FSA to spend, you might want to schedule doctor or dentist appointments before the end of the year, or buy prescription medicine, hearing aids, or contact lenses.

If you pay these expenses with your personal funds instead of your FSA debit card, make sure you submit your receipt for eligible expenses within the time required by the plan. Some plans allow you an extra 2½ months after the end of the year to use the unspent amount, so check with your plan administrator to find out your deadline.

Final Thoughts on Getting Ready to File Your Tax Return

The runway for meaningful end-of-year tax strategies will shorten, so now is the time to do a quick tax review and forecast to get ready to file your tax return. Tax strategy is an important and often overlooked part of your financial big-picture, so make it a priority at year-end and into the new year!

For hands-on help, consult an experienced tax advisor. Let Block Advisors help with services like tax preparation, payroll, and bookkeeping. Make a tax appointment.