When it comes to planning for tax season, a late start is better than never — and as the final quarter of the year approaches, here are some things to ensure you are ready to roll in April of 2020.
The best place to start? Going digital, according to Rebecca Jarvis, ABC News chief business and economic correspondent.
“There’s no better way to track what you’re spending, to track what your income is, to track all of these things that ultimately become paperwork when you’re doing your taxes,” Jarvis told WTOP.
“You want to declutter now, because the worst thing that can happen is that April 15 rolls around and you don’t know where the paperwork is.”
For any questions or concerns, consult with a tax adviser.
“You can also use tax software like TaxAct,” which will give additional advice on how you could be saving money,” Jarvis said.
Among last-minute adjustments you can do to knock down your tax bill in April: Check your withholdings.
“Employers adjust workers’ withholdings earlier in the year to reflect the tax overhaul,” Jarvis said, “but what people should be doing is making sure that actually happened.”
Jarvis suggests checking what your withholdings should be with the IRS withholding calculator. If you are not having enough withheld, you can always file a new W-4 form.
“Go straight to line six on that W-4 and fill in the dollar amount that you would like to have withheld for the remainder of the year,” Jarvis said.
Selling investments that are not performing well is another way to make a big impact on your tax savings.
“The tax code lets you sell investments that have fallen below your purchase price,” Jarvis said. “It’s a great time right now to talk to your accountant, your CPA, and take a look at everything.”
Jarvis also recommended maxing out your pretaxed retirement savings by adjusting your 401(k), and, for small business owners, making quarterly tax payments.