Thursday, April 22, 2010

How to Make Next Tax Season Less Stressful by Preparing Throughout the Year

April is usually a stressful month for most Americans and if you were one of the millions of taxpayers who were rushing to beat the tax deadline last week, you might want to take more action during the year to avoid the unnecessary stress next tax season. Earlier this week, the RDTC Tax Help Blog posted a great entry on how to start prepping for next tax season throughout the year. You can find a few of the tips below, or check out the full article here.

Collect and Store 2009 Tax Documents

Now that tax season is officially over it is time to store your financial records and copies of your tax returns. Depending on how the year goes, you might be able to use your tax return as a guide to prepare and file next year’s tax return.

Adjust Withholdings

If you had either a large refund, or a tax bill due this year then you might want to consider adjusting your withholdings. You can ask your employer for a W4 and have either more or less withheld from your paychecks. This can prevent an unwelcome tax bill next year.

Even if you received a refund, you should still consider adjusting your withholdings. By giving the IRS more money out of each of your paychecks than necessary, you are basically giving the federal government an interest free loan. Additionally, by changing your withholdings you can get more money every pay period.

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