At times April 15th seems to so far away, but it always seems to creep up very quickly. That is why it is never too early to begin thinking about organizing your taxes – you don’t want to be in the position of scrambling for receipts and other paperwork come April!

Some advanced planning will help make the process of filing less stressful and help avoid the unpleasant surprises people are often plagued with when going through the process. Getting an early start will give you time to research some of the latest regulations and tax rule changes that may affect your return.

One of the first steps in getting your taxes prepared is to collect all of the necessary information. One of the most important, but overlooked until you are actually doing your taxes, pieces of information are Social Security Numbers. You will obviously need your own, but if you file jointly or have dependents you will need theirs as well.

As to the actual documents you need to report your income, you will need your W-2 from your employer, 1099-INT forms showing interest income from different sources, and 1099-DIV forms for any dividend earnings from mutual funds, stocks or money market funds. Finally, taxable earnings from the sale of stock or other broker transactions will be listed on 1099-B forms that will be sent to you.

As if that weren’t enough, you will also need tax documents related to your mortgage interest or any other deductions you are planning on taking.

Once you have gathered the information, you should determine what IRS forms you will need to complete the tax filing. If you are self-employed, you will need additional forms. You may also need supplemental forms if you have made complex investment income.

If you have made major investments or experienced any major fluctuation in your income, such as a large inheritance, it may be wise to hire a professional. Be sure to know when the job may be too complex to do yourself while still receiving the maximum number of deductions and reporting your income accurately. However, if you simply just need a little coaching to get you through the process, a good computer tax preparation program goes a long way.

The sooner you make the necessary calculations for your taxes, the sooner you will know whether Uncle Sam owes you or you owe him. If you are lucky enough to get tax refund, you can expect a check from the government much more quickly if you file your return before April 15th. If you are in the unfortunate position of owing money, the more quickly you finish your taxes the more time you have to sit down and think of how you will make the payment.

You have the option of paying in installments or by credit card, but before using a credit card, you should your budget can handle it. If it looks like you will not be able to come up with the money that Uncle Sam is demanding, you may be able to file for an extension. To use an installment plan or get an extension, you must submit the proper forms before April 15th – which early preparation allows you to do.

Once you have completed your taxes for the year, you should take some time to review what you could do differently for the following year. For instance, you may have spent way too much time tracking down your tax documents this time. Perhaps you could create a filing system for important documents that will make it easier the next go around. If you start using a system and stick to it, everything will be at your fingertips next year.

Finally, if you owed a significant amount of money this year you could consider adjusting your withholding amounts on your paychecks. The same should be considered if you are receiving a huge return. In a perfect world, you would not owe any money or get any back.

Some consider it a great windfall to get a big check back from Uncle Sam, but in essence you have been loaning the government money at zero interest. If you are in the business of loaning money for free, give me a call. Otherwise, adjust your withholdings and start preparing for next year – after all, April 15th is never more than a year away.