Tax Season is here. For many of us, this means gathering our assorted W2s, 1098s, 1099s, and K1s, filling out our Tax Organizers and sending the paperwork to our Tax Preparers. We hope for a refund or, at least, that we don’t owe any more money than we’ve paid through withholding and estimated tax payments.
Every year, JGUA’s clients ask us what they can do to make their tax season go smoothly. In the spirit of helping to make everyone’s tax season as painless as possible, I’ve spoken with colleagues in the Tax Department and assembled some of our best practices for having a successful tax season. While this advice is written with our clients in mind, many of the suggestions apply to everyone. For instance, it is important to take into account year-to-year changes that impact your returns. Our Clients communicate this to us through their Tax Organizers, it’s equally important to note these changes if you complete your own return.
- Around mid-January, start reviewing your mail/email for incoming tax forms and set them aside in a dedicated tax documents folder. Use your previous year’s Tax Organizer or Tax Return as a “checklist” of paperwork to expect. Collecting paperwork as it arrives is much easier than hunting it down later.
- Complete your Tax Organizer! Your completed Tax Organizer is our guide for preparing your return, it provides essential personal and financial information and lets us know about any changes from the previous year. Did you move? Buy a new house? Have children enroll in or graduate from school? Little things, like keeping your contact and driver’s license information current, help to expedite your return.
- Get us your paperwork as soon as possible, but preferably all at once. Most of the common forms: W2s, 1098s and 1099s have to be postmarked and sent to taxpayers by January 31st. If you have what we call a “W2 Return” – a return where the paperwork is primarily W2s and 1099s – all your paperwork may arrive in early February. Remember for your JGUA accounts that we receive a copy of your 1099s. We operate on a first-in, first-out (FIFO) basis – the sooner you get us your information, the sooner we prepare and file your return. Moreover, if we notice an opportunity to lower your taxes like contributing more to your IRA, this leaves time to discuss those options.
- If JGUA prepares returns for several family members, consider coordinating your efforts to make sure we get all your paperwork at the same time (or around the same time). This can be very helpful, particularly in understanding dependent relationships, potential deductions and credits.
- If your Advisor or Tax Preparer sends follow-up questions about your return, try to respond promptly. Preparers like to hold questions, then send them all at once when your return is nearly complete so as not to bother you with repeated emails and phone calls. If you hear from us, your return is likely ready to be filed once we clarify a few points.
- Try our new eSign service. After a successful trial last year, JGUA is encouraging all of our clients to use eSign if feasible (each taxpayer needs their own email account to eSign). eSigning is the easiest way to expedite the electronic filing of your return as we no longer have to mail forms for you to sign. When using eSign, be sure to read the letter, review your return, and save a copy of your return for future reference.
- Unsure if you want to use eSign this year? Remember that we can also upload your return to your client portal for review. We will need all efile authorizations signed and returned to us to complete the efiling process.
- If you are eSigning and eFiling, consider using electronic tax payments or direct deposit for your refunds if you don’t already. Using direct deposit usually results in quicker refunds.
- Remember that Tax Season is about more than getting your return filed, it is a chance to discuss your financial progress and plan for the next year with your Advisor. If you have tax questions, talk with your Advisor and/or Tax Preparer. Having said that, please remember that tax season is hectic and gets exponentially more hectic as the tax deadline approaches.
- Ultimately, the best advice for having a successful tax season is to be as timely and complete as possible with your tax information so we can process your return and file as quickly as possible.
Then, we all need to hope the IRS reciprocates our timeliness and processes our returns in an expeditious manner.