You did it! Whether you’re patiently awaiting a refund or unenthusiastically writing a check, you can officially put tax season behind you. While tax time can be stress inducing for even the most seasoned accountants, not to mention taxpayers, it’s never too early to start preparing for next year. We always advise our clients to use this downtime as an opportunity to reflect on the past financial year and perform a little financial housekeeping.
1. Perform a year-end financial analysis
Having just reviewed your major financial documents for the year, you have a pretty good idea of your financial wins and losses. Taking a closer look with an open eye and willingness to learn can go a long way – in other words, use this last year’s financial experience to improve the future.
Analyzing your expenses can help identify ways to save more money. For example, consider raising your 401k contributions if you notice that your income rose last year and you are not maxing out currently. Or, if you aren’t there yet, committing to packing your lunch, or making your own coffee can add up throughout the year.
2. Consult with your accountant or financial advisor
Finances are complicated. After you’ve done your base analysis, consult with a professional for a deeper understanding. They can bring a fresh set of eyes to your financial situation and offer helpful solutions.
Maybe your goal is to buy a house this year. An accountant can help you prepare financially, compare different loan options, and explain how this will affect your taxes next year.
3. Implement new tools and strategies to track your finances
The best way to avoid a headache next April is to find ways to track and organize your finances throughout the year. Whether you file under a business or individually, there are simple things you can do.
For example, keep and organize your receipts. If you donate old clothes to Goodwill, be sure to take pictures of all items donated, and file your receipt now so you aren’t scrambling at tax time. Also, don’t be afraid to use technology to help you. Create an Excel spreadsheet to track your monthly expenses, or take advantage of mobile banking.
Final Note: With the recent changes to the tax law, it’s more important than ever to start planning now. If you have any questions about organizing your finances, we’re always happy to help – Just send us an email and we’ll talk.