Taxes Don’t Have to be Scary

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One dreaded “to-do” that creeps into everyone’s life is taxes.  Taxes don’t need to be scary and the dread of doing them can be reduced by a few simple tips.  Here are a few tips to remove the cob webs of what happened the year before when going to prepare your taxes in the beginning of next year.

Have a tax folder.  Let’s face it, we get inundated by mailers each and every day.  As we go throughout the year, we are mailed forms (or given) that have a tax impact.  Having a tax folder is a great place to place tax forms that you receive throughout the year.  That way when you go to prepare your taxes, you only need to look in one spot.  For example, you give some home items to a charity in February and receive a donation slip.  You won’t need this until next year’s tax return.  There is a pretty good chance it will be shuffled around for the year, or maybe even thrown away.  If it is in the tax folder, it is safe and sound, and can be found easily once needed to prepare your tax return.

Review your prior year tax return.  There are some items from your last year’s tax return that will be needed to file this year’s tax return.  There is another great purpose for reviewing the tax return.  If you have not created a tax folder, as listed above, reviewing your tax return will show you where you can likely expect to receive information.  So if you have a K-1 from a relative’s estate, or 1099 from a small investment account you forgot about, it can help trigger memories to make sure this year’s tax return is complete.  However, keep in mind if there were any changes that happened this year, such as moving to a new house, or transferring to a new wealth advisor, the tax return will not show the change.

Use Tax Software or Tax Professional.  Each year the tax code and calculations seem to get more and more complicated.  With this, the software that is out there today helps alleviate questions, and helps to ensure that your tax return is calculated correctly.  A tax professional will use software, but the added benefit is that he/she is there to answer questions and walk you through the tax return.  This can help alleviate some of the stress of not knowing if it is done correctly.

Tax Fraud.  Our personal information is summarized each year on tax returns filed with government bodies, which fraudsters would like to get their hands on.  So during tax filing season, keep in mind unscrupulous people might send you fake emails in order to gain access to your information.  Take extra precaution when opening emails from places that look funny you.  Better to delete an email, than to open it and put your personal information at risk.

These are four helpful tips to make sure your tax return does not have to be as scary this year as it did in the past.  Keep in mind that at Alpine Trust & Investment Group, the tax return is one area of your financial wellbeing.  The return is taken into account for your financial picture and we work with numerous tax professionals.  Who knows, we might even be working with your current tax professional now.


Stephen Hofmann, J.D., CPA, CFP®, is an AVP, Wealth Advisor & Investment Officer, with Alpine Trust & Investment Group.




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