tax filing

7 Best Practices for a Stress-Free Tax Season

If you’re organized, your tax preparation will go so much more smoothly.

It’s the most wonderful time of the year: tax season! All jokes aside, a 2020 study found that the majority of taxpayers dread doing their taxes. Taxes take time, can cost money, and many people find them confusing. They’re basically like homework for adults.

But taxes don’t need to be so terrible. Through years of experience and repetition, I have gained efficiencies to speed up the process. While you may not be at that level, here are seven ways to be more organized for tax season – so you can stop dreading the paperwork and get back to your life.  

1. Gather as you go

Collect all tax-related information in one place as it arrives. When you receive an envelope in the mail with a tax document enclosed, add it to that spot immediately. You’ll be able to easily find it later on, which will help make your tax filing a smoother process. 

2. Designate a place

Keep previous years’ tax information in a central location. In most circumstances, your tax filing this year will be largely similar to the previous year. For this reason you may want to reference previous tax documents to confirm specific numbers or even to see which documents were relevant. You can store your tax information in a folder on a bookshelf, a file in your safe, or even a “Box of Knowledge” in the closet. Pick one and stick with it. 

3. Go paperless

If you are technically inclined, get your tax statements electronically. It’ll be faster, better for document retention, and help you streamline your taxes in future years. 

4. Know what you need

Think about where your money is stored and any companies that may have a long-term relationship with your money. Check each of these places for tax-related information. For reference, if you have any of the following, you may need a related tax statement for each: 

  • A job: You should get a W-2 form, and if you received unemployment, you should get a Form 1099-G.
  • Debt: A mortgage for a home (Form 1098), student loans (Form 1098-E), a personal loan that’s forgiven (Form 1099-C), other loans.
  • Daycare: All the receipts you’ve saved from day cares or after-school programs showing your expenses.
  • Bank accounts: Savings accounts and interest-earning checking accounts (1099-INT form for interest you’ve received).
  • Investment accounts: Depending on what types of accounts you hold, there can be several forms to watch for (1099-B for capital gains, 1099-DIV for dividend income, 1099-R for retirement distributions, etc.).
  • Donations: Charity contribution receipts and end-of-the year receipts from any monthly or recurring payments.
  • Pandemic payments: Advance child tax credits (Letter 6419 from the IRS to show how much you received) and stimulus checks (you can utilize a 1444-C and/or Letter 6475 to reconcile the third stimulus payment and determine if any additional amount is owed to you).

5. File early

The sooner your taxes are filed, the surer you can be that they were submitted properly ahead of the deadline and that you won’t get any surprises from the IRS later on. Filing earlier may also lead to a quicker turn-around time on your refund. 

6. Know where you stand with the IRS

If you’re dying to know the status of your refund, the IRS has an online tool for that: the “Where’s My Refund” portal. Otherwise, if you have a tax question, it can be difficult to get a hold of the IRS. They are understaffed, catching up with many rule changes, and processing a lot of tax documents – including from the 2020 tax season. For this reason, you may receive a letter from the IRS that doesn’t make sense. Don’t panic. There’s probably a good explanation for it.

If you need to call them with a question, be patient and expect a long wait time. You can also check the IRS website to access tax records, see whether you owe the IRS any payments and whether they have processed your payments or tax returns. 

7. Know when to get help

The IRS doesn’t want to see mistakes on tax forms. If they catch a mistake on your form, it could cost you time, money and stress to get it resolved. Many tax-filing software programs are good for straightforward circumstances, but you may not receive the full refund you deserve. Being a business owner, having a higher income, and investing are among the factors that could complicate your tax-filing status.

The more complicated your taxes are, the more it makes sense to find a tax preparer (the IRS also has a preparer directory). A tax preparer or tax adviser can ensure your taxes are filed properly, that you take advantage of tax breaks when available, and can also correct mistakes with the IRS on your behalf. It’s a win-win!

Taxes don’t have to be scary … they only come once a year. They are not meant for you to panic or have anxiety. Being organized and a little professional help can take that stress away. Find a strategy that works for you. 

About the Author

Andrew Gillund, CPA, MBT

Primary Tax Adviser, Berger Financial Group

Andy Gillund, CPA, MBT, is a primary tax adviser and CPA for Berger Financial Group. He has over a decade of experience in accounting and helping clients minimize their tax burden. Andy has a B.S. in Accountancy and received his Master of Business Taxation degree from the University of Minnesota Carlson School of Management. He is active with the Minnesota Society of CPAs and the Volunteer Income Tax Assistance (VITA) program.

Most Popular

Why Are Gas Prices Still Going Up?
spending

Why Are Gas Prices Still Going Up?

The cost of a gallon of gas is at an all-time high. What’s driving the surge and will gas prices go down anytime soon?
May 23, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
Which States' Taxes Are Going Down
Tax Breaks

Which States' Taxes Are Going Down

State lawmakers are cutting income, sales and property taxes to return budget surpluses to residents.
May 25, 2022

Recommended

Are You Ready for Retirement? 5 Things You Should Think About First
retirement

Are You Ready for Retirement? 5 Things You Should Think About First

You’ve had a countdown clock running in your head for years, but unless you’ve planned for these five realities, you may not be ready to retire.
May 28, 2022
Do You Realize the Power of HSAs? Probably Not!
health savings accounts

Do You Realize the Power of HSAs? Probably Not!

Health savings accounts have tax-zapping superpowers. Check out these top 10 tips to help maximize the benefits of your own HSA.
May 27, 2022
4 Keys to Planning Your Hard-Earned Retirement Income Distributions
retirement planning

4 Keys to Planning Your Hard-Earned Retirement Income Distributions

The fear of running out of money in retirement is understandable. When you have a well-thought-out retirement income plan, you can quit worrying.
May 27, 2022
Don’t Want to Leave Money to Your Kids? You’ll Probably Change Your Mind.
estate planning

Don’t Want to Leave Money to Your Kids? You’ll Probably Change Your Mind.

How much is too much to leave your children? You may be surprised.
May 26, 2022