If You Can’t Avoid It, Organize It: Organization Is Critical To Financial Planning and Tax Preparation

How organized were you with your personal tax information this past year? Could you find everything you needed to provide to your accountant? Were you surprised at the amount of tax you paid?

Tax planning is one of the essentials to personal financial planning and wealth creation. And taxes are one of those things you need to think about all year long, not just during filing season. Having recently filed (or extended) your return, it’s time to take a look back and a look forward and determine how you can be better prepared for next year’s tax season.

Organization is key

Stay organized so you’re prepared to tackle your taxes next year. Ensure you’re on the right track:

  1. Keep all your tax-related items (i.e., receipts, income items) in one area. You’ll never have to look in different places if everything is in one place.
  2. Utilize technology. Most home printers have a scan feature which allows you to keep these tax related items stored and organized electronically.
  3. Plan throughout the year. If you have significant or unusual transactions during the year, call your financial advisor so he or she can discuss it with you. Better yet, call before you enter into this transaction. This phone call could end up saving you a lot of money.
  4. Help your financial advisor help you. In early to late fall, it’s time to do some year-end tax and business planning. Ask your financial advisor to help you with a year-end tax projection so you won’t be surprised this time next year.
  5. Prepare a scorecard. If you aren’t already required to prepare a personal financial statement, make sure yours is updated (at worst prepared). This statement will help you evaluate where you are in relationship to your financial goals.

Looking ahead

Planning isn’t just important when it comes to taxes. It’s important as you develop and meet your personal financial goals. Personal financial planning and wealth building doesn’t happen overnight, and it won’t happen without proper planning. Your financial plan might include life insurance, college planning retirement planning, wealth preservation and/or accumulation, estate planning, risk management, business continuation and tax planning.

Whatever your financial plan entails, make sure you start planning now for the future. The more you plan, the better financial position you can have. If you need help getting started or have questions, contact your financial advisor today. They can help you get on the path to solid financial planning.

This article was originally published in Illuminations: Facts & Figures from people with a brighter way, a Rea & Associates enewsletter, 6/19/2013.

Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.