Preparing for Tax Season at the End of the Year

28 November 2016 Written by   Published in Peaks Financial Fitness

My family cut down our Christmas trees in St. Charles Canyon this weekend. We figured that the weather would be pretty cold and snowy up in the mountains. So, we packed our snow clothes, but the good gloves were missing. My kids hadn’t put them back after they used them a couple of weeks ago. They had to use thin gloves and complained about their cold hands. We woke up to a blanket of snow this morning. Are you ready for the winter weather?

Winter storms remind me that the end of the tax year is coming up for most business and individuals. I need to prepare so that I’ll be ready for tax season. I’m going to be looking at a few areas of our finances:

Donations

Non-cash charitable contributions can include toys, cars, clothes, furniture, etc. Here’s the link to the IRS instructions that gives more information for donations that are worth more than $500. Our bookshelves are full. My kids rooms are so full. We are definitely not minimalists and might even be hoarders. I have been putting off Christmas shopping because we don’t have room for more stuff, and I don’t want to buy more stuff that will clutter our home. I’ve decided that we need to get rid of old things to make room for new things. We do a family work project each day. This week we are going to declutter our home. If you itemize deductions on your taxes, decluttering can also provide a tax deduction. Most people know that this is the last month of the year to donate tax-deductible items, but it’s easy to get busy with the holidays and not get around to doing it. I know from experience. So, I’m going to call around this week and find out where these can be donated. We have a van that hasn’t sold, so I started researching about donating cars this morning.

Stock


If you have stock that you would like to donate, check with charitable organizations about how to do this. This can be a great way to donate to your charities. I haven’t personally done this, but have seen it done by tax clients, and it can be a great benefit to you and the charity.

Money


You can always donate money to charities, and there are so many people and charities in need of donations at this time of year.

Retirement Contributions


How much did you contribute to your retirement account this year? Remember that you have until April 15th to contribute to your IRAs, but this is a great time to decide on how much that will be. Especially if you make lump sum contributions instead of regular contributions.

You can check with Wasatch Peak’s Financial Advisor, James Aoki at 801-627-8732, for more information on investing for retirement and the services available to help you.

Collect tax documents

One of my friends kept all of her tax related documents in a folder so that it was ready for tax season. I started doing that a couple of years ago, and it really helped me keep track of donation receipts throughout the year. I spend plenty of time searching for lost items, so anything that can help me with this weakness, is great. This could be done electronically by scanning in receipts. I did that for a while. Experiment and see what works best for you. There are a lot of ways to do this. Do you already do this? If so, please share how you do this.

Withholdings

This will depend on you and what’s available at your job. Did you have too much or too little withheld? Do you want to keep the same amounts for your health savings or cafeteria plans? My husband is starting a new job today, which will make us re-evaluate all of our withholdings, but you don’t have to start a new job in order to do this.

By making a few preparations now, taxes won’t catch you off guard.

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About Nat Craven

  • Natalie “Nat” Craven is a financial blogger, mom, and wife. She loves budgeting, eating cheesecake, and exploring Utah with her handsome husband and four active kids. 

    Nat studied Family Finance at Utah State University. She earned her Bachelor’s and Master’s Degrees in Accounting from Weber State University where she was awarded a scholarship to research taxation. She became a Certified Public Account (CPA). Nat is no longer intimidated by the tax code—even though it is a complicated foreign language. After working in public accounting for a couple of years, she left the industry to raise money-smart children, but kept up her license and education by doing online coursework. 

    She volunteered and worked for Cornerstone Financial Education, becoming a Certified Personal Financial Counselor (CPFC). There she helped teach personal finance classes and started a financial fitness blog.

    Through the years, she found her passion for budgeting as she realized that no one needs a CPA license or a Master’s degree in finance to manage their money well. Budgeting is a super simple principle to understand, but is challenging to apply. Her blog posts focus on the how we can “USE” our budget to reach our goals. Almost everyone has made a budget, but using it is powerful. Follow Nat on Twitter at @cravennat.

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