Published: January 2018
Author: Bank of England Mortgage Staff
January is a great time to get started on filing your taxes! It's easy to put this off but the closer you get to the deadline – the bigger the headache it is to get it done. By waiting, you cause yourself to feel more rushed and pressured, which can cause mistakes. Get your taxes out of the way! Being prepared and getting them done early will allow you to enjoy that refund check with the least amount of stress.
Consider taking these steps as you get ready to file:
MAKE NECESSARY DECISIONS
There are a couple different ways that you can file your taxes. Will you file them electronically? Will you meet with a professional? Take note of what changes have occurred in your life this year. If you have bought or sold a home, had children, gotten married or even changed bank accounts - this can all affect your taxes. Get an early look at what these milestones will mean for your taxes this year before crunch time in April.
CALL THE PROFESSIONALS
Certified Public Accountants (CPAs) get busy during these early months of the year. If you are choosing to enlist help from a tax professional, you will want to schedule your appointment as early as possible. Waiting until March or early April can leave you stuck if your CPA is booked. If you wait until late March or early April and your tax preparer's calendar may be booked, or if you need to have a follow-up meeting for missing information then you have plenty of time. Save yourself some stress and schedule early.
Take the relative calm of the first month of the year to get your paperwork in order. Gather your receipts, proof of charitable contributions and other tax forms in one place. Watch for any essential tax forms to be mailed to your home and have a special place to store them. Note any missing tax forms you may need and make the proper arrangements to get copies.
Eligible filers who submit their tax returns early enough can use their refund to further reduce the previous year's taxes. If you are eligible, you can make an Individual Retirement Account (IRA) or health savings account contribution for 2017. You can only make contributions to these until April 17, which is the day that taxes are due. The key to doing this is to file as early as possible – or else your refund will not come back in time to do so. Make sure to tell the account custodian the year in which you plan to apply your refund. If you skip that step, he or she may apply it to your 2018 contributions instead.
Preparing and filing your 2017 taxes early will help you to start thinking about your 2018 taxes. Use this first quarter to harvest tax losses. Prepare your return for other uses like applying for a mortgage or adjusting your withholding. Be prepared and save yourself the stress. File for your 2017 taxes early!
Bank of England Mortgage does not, and does not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations.