When do you usually begin to work on your income tax return?
Do you wait until the last minute? Do you have everything ready on January 1st?
I work on them all year long.
Since I am self-employed, I make estimated quarterly income tax payments based on what I think my income for the year will be. I keep an up to date set of books so that I can evaluate such things as advertising campaigns, cash flow, etc., but this practice also allows me to regularly assess my income and make adjustments to my quarterly estimates.
I am never able to file on January 1, because I am dependant on tax documents from customers, etc. which have later deadlines, but when those deadlines have passed (ie: 1099 filings, etc.) I'm ready to go!
An interesting question- I take it this is where your energies are right now
I start working on my taxes the last trading day of that fiscal year. Got to make sure I'm in or out of positions for the end of that trading year.
As for the physical files, I've already estimated all my capital gains, dividends and interest payments and w-2 earnings. I track that stuff throughout the year on a spreadsheet, so I don't have any surprises (either a windfall with a return or a massive amount of tax due - although I prefer the windfall). I use the IRS's Withholding calculator and double check it throughout the year (Site : http://www.irs.gov/individuals/page/0,,id=14806,00.html - for 2012!)
I try to minimize overpaying my taxes throughout the year from my earned income, but want to make sure I'm paying enough taxes to cover my other forms of income. I also throttle my 401k contributions (by increasing them) to lower taxable income if I get too close to a bracket (and can afford to do that).
I normally have every complete and together the first week the IRS starts accepting returns. Which looks like it will be Feb 15th this year, since that's the last day institutions have to get you tax paperwork.
Hope that helps!~
I do my taxes early as well - as soon as I get all my W-2s and 1099s, I am good to go. I want my refund in my hands as quick as possible. If I have to pay, I have time to get my money together.
I work on my taxes as soon as I get my W2 forms at the end of January.
Normally once a year at the end of the financial year in spring time....Sangeeta
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