How To Survive Tax Season

Start Early …

Preparing your tax return should be a marathon, not a sprint. By starting now, you give yourself plenty of time to identify what you have and what you’re still missing. It also lets your CPA work without the deadline pressure of Tax Day, which means fewer errors and more time to find ways to minimize your tax bill. 

… And Go Slow

Procrastination leads to rushing, and rushing leads to mistakes. You don’t have to complete your return in one sitting: Give yourself time for all the forms to arrive and to double-check your work. If needed, be prepared to file an extension – there’s no harm in doing so, especially if that extra time results in avoiding unforced errors. (And no, an extension won’t increase your risk of an audit.)

Use Your CPA’s Questionnaire

While filling out the questionnaire might be tedious, it can help make sure you don’t forget anything important and prevent having to scramble on Tax Day. Be sure to review every question: Lives change from year to year, and those answers can help avoid misunderstandings or missed opportunities.

Be as Complete as Possible

While it’s understandable to want to send tax documents to your CPA as soon as you get them, doing so in batches risks misfiled or lost forms. Try to deliver all your documentation at once – including those tax forms that aren’t standard, such as confirmation letters for charitable donations.

Keep Your Old Files Handy

It’s a good idea to use last year’s returns as a guide for preparing this year’s returns. As a rule, you’ll want to keep tax documents for three years, which is the limit for filing an amended return (seven years if you’re reporting one-off transactions such as a bad debt deduction). For shorter-term documents, keep your monthly statements until you get the annual summary statement, and your annual statements until you sell the positions or close the account.

Protect Yourself From Identity Theft

Tax season is prime time for identity thieves to try to access your personal financial information. Ignore any texts, emails, social media messages or phone calls claiming to be from the IRS – if there are issues with your return, the IRS will send you a letter. Filing electronically and requesting an Identity Protection PIN from the IRS can also deter identity thieves from filing fraudulent tax returns. 

For more about protecting your identity, check out Staying Safe in an Online World.

Bonus: Plan for the Future

Before filing away your return, bring a copy to your Baird Financial Advisor for review. They may be able to identify planning opportunities, and can collaborate with your CPA on strategies that can pay off now and in the future. Talk to your advisor to learn more.