Oh yes, it’s coming! Tax season is around the corner and we need to get ready for it! I have to say it’s not my favorite time of the year. Even though I am an accountant, I dread this time of the year. It’s not the filing that causes me the headache, it’s the preparation before! I have to organize those receipts to maximize my return or reduce my tax bills! That’s just one of the biggest challenges during tax season for me. Tax season challenges vary as much as people do!
Biggest challenges when it comes to tax season
I did a small survey with our readers. I value their opinions and wanted to know if they have the same tax season challenges as me. I also wanted to know what others faced at tax season time. Take a look at their answers!
- Getting organized. A common theme in the answers revolved around just getting organized. One reader said she had a hard time “finding all the papers, receipts etc and getting it organized!” Another reader told us that it was challenging to keep all the receipts and other information organized so it’s easier to find during tax season.
- Filling out the forms. Another common tax season challenge that we heard a lot about it difficulty with the forms themselves. One reader wrote that her biggest challenge is finding the right lines to put certain things and finding medical receipts, etc. Another had a difficult time figuring out where everything went. She said “I also always seem to lose or skip the spot where you input your ‘rent’.” Readers also found it difficult to figure out what’s deductible and what isn’t.
- Finding the time. Taxes are time consuming! Finding the time to do them seems to be a challenge many readers face during tax season. One wrote that getting her husband to help was her biggest challenge! Another wrote that it was difficult because she had several short-term jobs last year.
- Getting all the deductions. Readers find it challenging to make sure they’re getting all the right deductions, especially when they have their own businesses!
So the biggest challenges are : organization, time, getting every deduction! How can we overcome them?
Overcoming Biggest Challenges During Tax Season
Organization is key when it comes to your tax return: You don’t want to forget a receipt that would have saved you money! Here are some few tips I developed over the years:
- Have a folder for your tax receipts. It can be also a shoe box (I prefer this Smead All-in-One Income Tax Organizer, 12 Pockets, Flap with Elastic Closure, Letter Size, Navy/White (70660) folder). Each time you get a receipt for tax purposes: be it restaurant, phone bill, receipts for kids that may entitle you to a deduction: put in there!
- Have en electronic folder for your tax receipts: during this digital era, most of the receipts are online. As soon as you get them, file them in a folder! Easy!
- Once every 2 weeks, remove all the receipts from your car or your purse! Everybody does this and keeps them there, so don’t try to pretend you don’t! I usually go into my husband’s car and find receipts in there! Don’t forget them. You will kick yourself later!
- Once a month or even 2 months depending on the number of receipts you have: organize this physical folder (or e folder) or shoe box into separate folders with proper labeling: one for the phone bills, one for interest rates, etc! It’s a life saver at the end of the year!
- Then have a spread sheet by type of expense and write down all the amounts! Let your older ones help you! My son is happy to do that for me. He learns Excel and is proud! This is great because it also helps you stick to your budget as you can see how much you’re spending on extras.
- Now if you didn’t use the above tips during the year, what should you do: well do it as a family activity (of course kids need to be old enough to help you: let them help you find those receipts: in the car, in some drawers in the kitchen, check your emails, your car! Organize them write them down
Well if you used the tips above, you will save lots of time . Otherwise, let your spouse help you! If he or she cannot, try to do it over a certain period of time. You don’t have to wait until last minute to do it
Getting every deduction
Since you gathered all your receipts, you will certainly optimize your return. But you may forget some deductions! I highly recommend using a tax software to do your taxes. They have a step by step questionnaire that will enable you to optimize your return! Those tax software programs also help you make sure you’re filling out the forms properly, taking care of two tax season challenges at once!
With a little organization throughout the year, you can make sure you don’t face any tax season challenges next year! It’s not too late though for this year. It may take a little extra time, but you can do it!
Need more great tips on how to overcome your biggest tax challenges? Check out these videos: