April 15th is Tax Day – the day your 2018 tax returns are due. Make sure you are prepared to file your taxes with these helpful tips.
#1 Gather Receipts and Documents
If you’re planning on itemizing deductions, it’s a good idea to start gathering all the necessary receipts and documents. Be better prepared for next year by setting aside a specific folder or box to organize your documents so that they are more readily available. While the IRS does not require you to send in these documents for deductions, you will need them if you’re audited.
#2 Track Down Last Year’s Tax Return
Make sure you have information from the previous year’s tax return on hand. Use it as a point of reference. If you had complications or problem areas, make sure you have a plan to avoid those issues. This may help you determine whether you need professional tax help or if you can file taxes yourself.
#3 Max Retirement Contributions / Charitable Donations
In 2018, tax laws raised 401(k) contribution limits from $18,000 to $18,500. This gives you the option of adding a little more to your retirement. Take into account tax deductible charitable donations. Be sure you have the supporting documents for the tax deductible donations you’ve made in 2018.
#4 Plan for Your Refund
What do you want or need to do with your refund? Depending on your finances, you may want to use the money towards a vacation or maybe you need to save it in case of an emergency. Perhaps you can save a portion of the refund and spend the rest. Just make sure you have a clear plan so that it does not go to waste.
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