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Why You Should Work on Your Taxes Before the End of the Year

taxesChristmas is right around the corner. You are already planning menus, thinking of all those Christmas cookies and ready to open gifts with your family. Another you should be thinking about is starting on your taxes.

You didn’t misread that part. It’s time to start preparing those taxes. You might think it’s too early since you have until April to file, but it really is not. Here are some reasons why you should work on your taxes before the end of the year.

No Last Minute Scurry

Taxes are nobody’s favorite thing to do, especially if you own or run a business. If you get started now, you won’t be scurrying to prepare materials, finding extra time to meet with your accountant or hoping Turbotax doesn’t crash as you submit your filing a day before the deadline. (We’ve all been there at least once.) Giving yourself time to prepare takes away added stress.

Take Advantage of the Holiday Lull

Around the holidays, things may seem crazy but most businesses are usually slower, unless you work in retail. Use the downtime to gather everything you need, like receipts, W-2s, etc. By having your taxes ready to go before the spring rush, you’ll help your stress levels, and get your foot in the door first with your accountant. Their busy season is just starting, so the more prepared you are and the sooner you can get in, the quicker they can get to your taxes.

Create a Better Plan for the Year Ahead

By looking at your taxes now, you can take advantage of deductions and other money saving strategies. If you wait until March, you may find you owe more than you thought and have no way to change deductions or move money. If you can get a ballpark of what you owe before the end of the year, you can plan how to pay or what habits you need to start changing to avoid the situation next year.

Double Check Self Employment Taxes

If you are self employed you know that you will most likely owe taxes at the end of the year. Taxes may stay the same or they could change. If you look now to see what you owe, and it’s more than you planned for at the beginning of the year, you can send some invoices out earlier to collect payment. Or if you are okay tax wise, you could delay some invoices to next year. A big tax surprise at the end isn’t the greatest way to start out a new year.

Plan for Charitable Gifts

If you start looking at your taxes now, you can look at ways to deduct more, such as donating to charities. December is a huge month for charitable giving as businesses and individuals look to create more tax write-offs. You have until December 31 to write these off for the current year. After that, deductions go toward your 2017 taxes.

Reviewing your taxes early allows you to better plan for what you owe, as well as time to move assets around so you can avoid some fees and taxes if possible. Start looking now at your taxes and what you can deduct. Better planning leads to smarter money management. In turn, this leads to comfort in knowing your money is taken care of. Take a day or two to review before the holidays. It’s better to be safe than sorry!

Have you started reviewing your taxes? Do you plan to work on them before the end of the year?

Photo courtesy of: stevepb

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Kayla is a mid-20s single girl living in the Midwest, USA. She is focused on paying off her consumer and student loans, while simplifying her life and closet. You can join her on her journey at ShoeaholicNoMore or follow her on Twitter.

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