The more you’re able to keep records centralized, the easier it is to make the most prudent financial decisions. When records are not available, even the most experienced tax professional may have to exercise great care, limiting the available options.
The ability to take advantage of good tax planning is your right as an American taxpayer. But a disciplined and consistent approach to keeping all of your tax records at the ready is essential.
Here’s how to make it easier:
Use Electronic Records Whenever Possible
Electronic records are essential to simplifying everything to do with taxes. Though they’re more common than ever, you usually have to sign up for them – especially if you are dealing with smaller banks and credit unions. Electronic records don’t get misplaced or damaged, so they’ll simplify every other action you take when it comes to your tax strategy.
Set Aside Time to Review Records Quarterly
Unfortunately, financial institutions don’t let you access all your records forever. As bank statements and other account correspondence “age out,” you might have to make a special request to get copies. For this reason, you should take an hour or two to compile your records each quarter and verify they are ready for the end of the year.
Link to Your Tax Preparer’s Systems
In some cases, your tax preparers may be able to provide you with special online access that lets them download bank statements and other materials. With this, you won’t have to be worried about keeping everything on file. Such systems use powerful security measures, too. Ask your tax pro for information – it’s much easier than using the latest iPhone.
Have a Process in Place
If you have multiple bank accounts, complex investments, or business holdings, your tax may be a little more complicated. You might have to get information from several different sources, so write things down – a checklist may help you avoid any oversights.
Ask Questions as They Arise
The tax landscape has changed quickly in the last few years. It’s normal to have questions – and there’s no such thing as a silly one! When tax questions occur to you, don’t wait. Reach out to your tax professional right away to find out what you need to know.
Tax planning is easier when you work with professionals you trust. To learn more, contact BD Financial Concepts.