The late night host, Jimmy Kimmel has a recurring bit where they assemble clips of local newscasters exclaiming about the extremely predictable change of the calendar, “Can you believe it’s March? Can you believe it’s already Summer? Can you believe it’s the New Year?” It always gets laughs from the audience, many of whom have no doubt caught themselves making similarly over-obvious observations.

A piece of advice, though: If you want to stay on the good side of your tax preparer, don’t send them a list of questions in an email that starts with, “Can you believe it’s already April?”

On the list of things most people would prefer to procrastinate, taxes are right up there with certain medical procedures. Thinking ahead about your taxes, though, can make your April go much more smoothly. There are also things you can do ahead of time that could save you money.

Save time and money

First of all, about that tax preparer. If that person is you, I bow to your grit and fortitude. But if you’ve decided that taxes aren’t your thing, or your financial life is just too complicated, it can be worth it to hand them over to a professional – someone who can advise you on ways to minimize your taxes and make them more efficient. Also, keep in mind that any tax tips you read about should be checked out with a professional who knows about your specific situation. (That includes anything in our newsletter!)

Whether you do your taxes yourself or have someone do them for you, planning will be the key to getting them done on time, accurately. Here are some things you can start working on today that will make life easier next Spring. After all, can you believe Summer is almost over?

Set reminders. Add important tax deadlines to your calendar, including a date for having all your documents assembled.

Create a system. Decide how you’re going to organize your documents. Will you use envelopes, folders, or digital files? Save documents as you receive them, including proof of income like W-2s and 1099s; records of deductible expenses like medical bills, home improvement receipts, charitable donations, and business costs; and tax forms from investments.

Maximize your deductions. Be sure you’re contributing as much as you’re able to an IRA or 401(k) to reduce taxable income. Health savings accounts and flexible spending accounts also have tax benefits, if either are available options for you. You’ll want to work with your financial planner or tax advisor to determine how to use these kinds of tax saving strategies.

Account for changes. Major life changes such as a new job, a move, marriage, divorce, or a new family member can impact your taxes. Don’t put off addressing significant changes until tax time, you may have to take action sooner.

Think about estimated taxes. If you’re self-employed or have significant non-wage income, you may have to pay quarterly estimated taxes to avoid a penalty. Quarterly taxes can catch you by surprise if you’ve gone from salaried to freelance work, or if you’ve recently retired.

Proactive tax strategies. If you think ahead, you can take advantage of ways to lower your taxes – both in the near and long-term. Your Arrivity financial planner can show you how to harvest losses, do a Roth conversion, or take gains in years when your income may be lower.

I’ve got a great tax guy who’s available year-around to give me advice (except he seems to go missing for a week or so after April 16). Each winter he sends out a message with a deadline, telling his clients that if they have all their information submitted by a certain date, they can have their taxes done by April 15. Otherwise, he’s filing for an extension. That way, no one can say they’re surprised.

Things to think about before Tax Day looms:

• Do you worry about how much you’re paying in taxes? Talk to your financial planner about strategies that can help minimize them.
• No idea where to start looking for a tax preparer? Your Arrivity financial planner can provide you with recommendations.
• Do you hold actively managed funds in taxable accounts? Beware that capital gains distributions will generate income that could push you into higher tax brackets.
• Are you retired and perplexed about how to draw on your accounts in the most tax-efficient way? Your Arrivity planner can guide you.

Tell us what you think! If you’ve worked with someone on the Arrivity team to create your financial plan, we’re looking for your feedback. Please take a moment to complete our short anonymous survey HERE.

Please contact us at 206.217.2583 or info@arrivity.com if we can assist you or someone you know with financial planning.

The foregoing content reflects the opinions of Liz Behlke and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.