As 2018 comes to an end, many people will start thinking about their tax situation. To put the money you earn to the most use, though, you should begin tax planning earlier. Here are a few ways you'll benefit from playing the long game. 

3 Reasons to Begin Tax Planning Ahead of Time 

1. To Save All Essential Documents 

If tax planning is always in the back of your mind, you are more inclined to save related documents like receipts and invoices for deductible expenses. If you donate to a favorite charity in June, for example, but don’t file until the following February, you probably won’t be able to find any records of it—unless you put it in a designated place. Other critical documents to save include those regarding gambling winnings and losses, childcare receipts, savings plan contributions, and property closing documents. 

2. To Streamline the Filing Process 

Every good tax planning strategy demands a bit of organization. Having all your documents filed neatly away, for example, will make it easy to cross-check the details on any yearend statements. And keeping an ongoing spreadsheet of expenses means a quick glance at the total is all you’ll need to determine whether to itemize or take the standard deduction. 

3. To Minimize Your Tax Burden 

People who plan for tax season 12 months out are more likely to get a sizable refund because they made all the necessary payments during the year and know what they can deduct. If, however, you still end up owing the IRS money, filing earlier makes it possible to establish a payment plan if needed. Some people are inclined to file late if they owe the IRS so they can save up, but doing so only increases the total financial burden, as they accumulate penalties and interest. 

If you want to devise a 12-month tax planning strategy, turn to Wilson, Rea, Beckel & Associates CPAs LLC in Pagosa Springs, CO. This accounting firm is proud to provide comprehensive financial services for both individuals and businesses throughout the Four Corners area for nearly two decades. To learn more about their services, visit their website or call (970) 731-1040 to discuss your needs today.