Ah, tax season. It’s the most challenging time of the year for those who fail to plan.
Each year, a significant number of tax filers are scrambling to get organized at the very last minute, says Kurt Rosentreter, a CERTIFIED FINANCIAL PLANNER® professional, chartered accountant, and senior financial advisor with Manulife Securities.
For most, tax time is unpleasant because, more likely than not, it’s about money being taken away. “Psychologically, tax preparation is an uphill battle – unless you’re fully prepared and have a plan,” he says.
Having a plan will help reduce stress and ensure money stays in your pocket. When it comes right down to it, there are not too many people who wouldn’t find the joy in that!
Here are five tips to turn the headache of tax season into a financially sound future:
- Start early: The beginning of the year is the perfect time to start working with a financial planner. A CFP® professional can help you see the big picture. A holistic approach will not only encompass tax planning, but retirement goals, charitable giving, insurance needs, and other strategies that fit your personal situation. The benefits will reach far beyond the tax season.
- Organize: A well-organized approach will reduce preparation time and help keep professional fees to a minimum. Develop a system that works for you that will stand the test of time. Once the system is established it will be easy to keep everything organized throughout the year – every year.
- Fill in the blanks: As February and March roll around, ensure that you have all relevant receipts for investments made both inside and outside of a retirement portfolio. It can take time to follow up on missing documentation, so it only makes sense to begin the process as soon as possible.
- Be available: If you are using the services of a tax professional, make sure you are around to answer questions once you’ve handed over your documentation. Getting answers promptly will speed up the process and help keep costs down.
- Make a return visit: Once the completed tax forms have been filed and the pressure is off, make a return trip to your financial planner to review your plan, make adjustments where necessary, and ensure that you have all your ducks in a row in advance of next year.