Because of COVID-19, the 2019 tax filing deadline hasn't yet arrived. But if you're ahead of schedule and have already finished up last year's returns, it's time to start thinking ahead to next year. While there are many months before the IRS begins accepting 2020 tax forms, the actions you take right now could make them much easier to fill out later on.
In particular, there are four things you may want to do ASAP so you're as prepared as possible when the time comes to fulfill your obligations to the IRS next year.
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1. Keep a copy of your 2019 return
Having access to last year's return can make it much easier to complete your forms since you won't have to start from scratch. If you use online tax filing software, most programs store your past returns. But if you submitted a paper copy or if you think you might switch programs, it's a good idea to keep a printout on file so you can reference it if you need it.
2. Jot down some notes for yourself on the filing process
Right now, the process of filing your 2019 return is probably fresh in your mind. But you'll likely have forgotten many of the steps you took by the time you're filing your forms next year. To help out your future self, make notes of any questions you had that you got answers to or any issues that came up during the filing process. You can refer back to these next year, and you'll be ahead of the game since you'll already know where you ran into trouble and how you solved the problem.
3. Tally up your deductible expenses as you incur them
One of the biggest hassles when filing your taxes is adding up all your potential itemized deductions to see if claiming the standard deduction makes sense or if you could save more by itemizing. You can make that process much easier by adding up financial transactions that could lead to potential deductions as you make them. That way, you won't have to do a big calculation at the end of the year.
If you know you'll be itemizing, it's also a good idea to tally everything up as you go along. So if you make a charitable donation, spend money on deductible business expenses, or have large medical expenditures, add everything to a spreadsheet you can refer to when it comes time to claim your deductions on your returns.
4. Keep all relevant documents in one place
Throughout the year, you may get receipts for donations or other deductible expenses. You don't want to have to go looking for this paperwork when tax filing time comes around, so keep everything together. You can create a file folder in your office or keep a box under your bed and put your paperwork into it as soon as you receive it, so you can just pull it out and have everything you need.
Keeping on top of these tasks will make filing next year a breeze
It may not be fun to think about tax filing throughout the year. But by getting organized early and keeping track of deductions as you go, you can make sure you don't run into trouble when you sit down in 2021 to file your 2020 returns. Your future self will thank you for the efforts you made, as completing your forms will be simpler than ever before.
