As anyone who has ever filed taxes knows, tax season is in high gear from January to April. In January, you’ll get a tax package from the IRS and start receiving the documents needed to complete your return. You’ll get a W-2 wage statement from your employer, as well as a Form 1099 from each bank or financial institution that paid you interest, from any brokerage firm where you have earnings or losses, and from the corporations and mutual funds in which you own shares. As you get these documents, it’s smart to file them in a place where you can find them easily.
As April 15 approaches, you can use the information from your inventory to do some initial tax calculations. That will let you predict whether you’re going to get a refund or will owe money. And remember that the earlier you file your return, the sooner you receive a refund, if you’re owed one.
April 15 is also your last opportunity to contribute to your Individual Retirement Account (IRA) for the previous year. After that, the contributions you make will count toward the next year. Contributions to Simplified Employee Pensions (SEPs) and Keogh plans are also due by April 15, unless you have an approved filing extension.