How to Prepare for Next Year’s Taxes 

Tax season can often feel like a whirlwind of stress and last-minute scrambling. But what if there was a way to breeze through filing next year's taxes with confidence and ease? By taking proactive steps now, you can set yourself up for success and make the process smoother when tax time rolls around. Here’s a range of strategies to help you prepare for next year's taxes right now.

1. Organize Your Financial Documents: Start by sorting through and filing this year’s financial paperwork to make sure you know where everything is and won’t have to scramble when April rolls around. Gather your income statements, expense receipts, investment records, and any other relevant paperwork. Having everything organized in one place will save you time and prevent important documents from getting lost.
2. Track Your Expenses: Consider using a digital tool or a spreadsheet to track your expenses throughout the year. Categorize your spending to make it easier to identify deductible expenses when you're preparing your taxes. By staying on top of your expenses throughout the year, you'll ensure you don't miss out on potential deductions.
3. Review Changes in Tax Laws: Tax legislation can change from year to year, affecting deductions, credits, and other tax-related matters. Stay informed about any updates to tax regulations that might impact your financial situation. This knowledge can help you plan your financial decisions more effectively.
4. Contribute to Retirement Accounts: Contributions to retirement accounts like 401(k)s or IRAs can offer both short-term tax benefits (reducing your taxable income for the current year) and long-term financial security. Maximize your contributions to take advantage of these benefits while securing your retirement.
5. Adjust Tax Withholdings: If you received a substantial refund this year, you might want to adjust your tax withholdings to have more money in your paycheck throughout the year. Conversely, if you owed a large amount, adjusting your withholdings can prevent a similar situation next year.
6. Explore Tax Credits and Deductions: Familiarize yourself with available tax credits and deductions that apply to your situation. Research credits for education, energy-efficient home improvements, and more. Keeping these in mind throughout the year can help you make qualifying purchases strategically.
7. Consult a Tax Professional: If your financial situation is complex, it's wise to consult a tax professional. They can provide personalized advice based on your circumstances and ensure you're taking advantage of all available opportunities to minimize your tax liability.
8. Consider Charitable Contributions: If you're inclined to give to charitable causes, consider making donations before the end of the year. Charitable contributions can be tax-deductible, so strategically planning your giving can benefit you and the causes you support.
9. Review Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs): If you have an HSA or FSA, review your contributions and expenses. These accounts can offer tax advantages for medical expenses. Adjust your contributions as needed to maximize your tax benefits.
10. Stay Ahead of Deadlines: Mark important tax-related dates on your calendar, such as estimated tax payment deadlines and the date when you need to file your taxes. Being aware of these dates will prevent any last-minute panic.

Taking proactive steps now to prepare for next year's taxes can significantly reduce stress and help you optimize your financial situation. By organizing your documents, tracking expenses, staying informed about tax laws, and making strategic financial decisions, you'll be well on your way to a smoother and more successful tax season next year. Remember, a little effort throughout the year can lead to significant rewards come tax time.

Raymond James and its advisors do not offer tax advice. You should discuss any tax matters with the appropriate professional.