Tax season often brings stress, deadlines, and endless paperwork. With some preparation and strategies, you can turn this chaotic time into a manageable and seamless experience. The key lies in preparation—getting your documents, financial information, and tax strategies in place well before deadlines loom.
Here are seven proven tips to help you take control of tax season and approach it with confidence.
1 Build a Year-Round Filing System for Tax Documents
One of the biggest sources of tax season stress is scrambling to find missing paperwork at the last minute. Prevent this by setting up a year-round filing system. Start now.
Action Plan:
- Use labeled folders (physical or digital) for categories such as income, deductions, credits, and expenses.
- Whenever you receive tax-related documents, file them immediately.
- Scan important paper documents and store them in secure cloud storage for easy access.
Pro Tip: Automate digital record-keeping by linking your credit union and investment accounts to financial management apps that categorize transactions throughout the year. Read the Benchmark blog, “From Blah to Brilliant: Transform Your Budget With These Must-Have Tech Tools” for an overview of budgeting and expense-tracking tools.
2 Create a Personalized Tax Checklist
A comprehensive checklist is a powerful tool that can keep you focused and help you avoid last-minute oversights.
What to Include:
- Income statements (W-2, 1099, or other forms)
- Investment income and capital gains records
- Documentation for deductions and tax credits (e.g., mortgage interest, medical expenses, charitable donations)
- Dependent information and Social Security numbers
Pro Tip: Update your checklist throughout the year as tax rules or your financial situation changes. H&R Block provides an extensive online tax documents checklist that may assist you in creating your personalized tax checklist.
3 Schedule Regular Tax Check-ins Throughout the Year
You can commit to implementing this idea now for future benefit. You will avoid a frantic year-end scramble by setting calendar reminders to review your tax-related documents and finances quarterly.
Action Plan:
- Review income, expenses, and potential deductions every three months.
- Adjust your withholding or estimated payments as needed to avoid surprises.
- Keep an eye on any life changes (marriage, home purchase, job switch) that might impact your taxes.
Pro Tip: Add a final “wrap-up” check-in in December to ensure you’re ready for tax season before the new year begins.
4 Start Gathering Documents In January and February
The earlier you start collecting documents, the better positioned you’ll be to file your taxes on time.
Action Steps:
- By mid-January, watch for incoming tax forms (like W-2s and 1099s) and begin adding them to your organized system.
- If you don’t receive the required forms by early February, follow up with employers, credit unions, banks, and investment firms.
Pro Tip: Use a checklist to track which forms you’ve received and which are still outstanding.
5 Maximize Deductions and Credits with Advance Tracking
Deductions and credits are easier to claim when you track eligible expenses throughout the year.
Key Areas to Monitor:
- Charitable contributions
- Medical expenses
- Home office deductions (for self-employed individuals)
- Education expenses
- Mortgage interest
Pro Tip: Keep digital copies of receipts and categorize them as you go to simplify tax preparation. Speak to a tax advisor for a complete listing of relevant deductions.
6 Set Up a Dedicated Tax Savings Account
If you’re self-employed or earn freelance income, a separate tax savings account can save you from a financial scramble at the end of the year.
Action Steps:
- Calculate your estimated tax liability and set aside funds monthly.
- Automate transfers to a dedicated tax account to ensure you’re always prepared. Benchmark’s Ultimate Checking and Savings Accounts are a great option for saving. A Benchmark short-term certificate is another option.
Pro Tip: Aim to save at least 25-30% of your income to cover federal and state taxes.
7 File Early to Avoid the Rush
The earlier you file, the less stress you’ll face as the deadline approaches. Filing early also reduces the risk of errors and gives you time to correct any issues.
Action Plan:
- Aim to file by late February or early March if possible.
- Double-check all information to avoid costly errors.
- Opt for e-filing and direct deposit to expedite any refund.
Pro Tip: Filing early also minimizes the risk of identity theft, as fraudsters can’t use your information if you’ve already filed. If you file without a tax professional’s help, visit the IRS website for filing options.
Plan Ahead for Peace of Mind
The key to a stress-free tax season is preparation. By staying organized, tracking documents throughout the year, and getting a head start on tax filing, you can save time, money, and a lot of worry. Tax season may not be anyone’s favorite time of year, but with these actionable steps, it doesn’t have to be stressful.
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This blog has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.