Congratulations on Filing Your Taxes! Now What?

Congratulations on filing your 2022 tax returns! You’ve done the hard part, and now it’s time to relax and go do whatever you have always wanted to do. But before you do that, there are a few things you should consider doing now that you are done with taxes. In this blog post, we will give you some tips on what to do to make the most out of your post-tax season.

Check Your Tax Refund Status: The most convenient way to check on a tax refund is by using the IRS’s Where’s My Refund? tool. Taxpayers can start checking their refund status within 24 hours after an e-filed return is received. The tool also provides a personalized refund date after the return is processed and a refund is approved. The tool displays progress in three phases:

  1. Return received
  2. Refund approved
  3. Refund sent

When the status changes to approved, this means the IRS is preparing to send the refund as a direct deposit to the taxpayer’s bank account or directly to the taxpayer in the mail, by check, to the address used on their tax return.

The IRS updates the Where’s My Refund? tool once a day, usually overnight, so taxpayers don’t need to check the status more often.

Taxpayers should allow time for their financial institution to post the refund to their account or for it to be delivered by mail. Calling the IRS won’t speed up a tax refund. The information available on Where’s My Refund? is the same information available to IRS telephone assistors.

Get Organized: You may have had to scramble to get your paperwork in order before filing your taxes. Use this time to start getting your financial documents in order so that next year, the process is a lot smoother. Make sure all your receipts, statements, and other documents are in one place, and you know where to find them. It is less important to have a certain organization system as long as you have some sort of system to organize and capture your needed information. You should also purge unnecessary documentation. It is generally accepted that you can purge tax data 3 years after your return is filed. Make sure to keep items that pertain to open transactions such as the purchase of real estate or purchase of stocks for example.

Plan for Next Year: It’s never too early to start planning for next year’s tax filing. Consider meeting with a tax professional, reviewing your income and expenses, and learning about any tax law changes that might affect you. Additionally, you might want to think about adjusting your withholding or estimated payments. I generally recommend to clients that they reach out around mid year and potentially again in the fall for a tax projection. The only information needed is recent pay stubs and projected income if self employed. With that limited information it is easy to project a tax return, see where you will be come tax time and make hopefully small adjustments if any.

Celebrate: Filing your taxes can be a stressful experience, but it’s an accomplishment worth celebrating! Treat yourself to something you enjoy, whether it is going out for dinner, buying yourself something you’ve been wanting for a long time, or taking a day off from work to relax.

Make Smart Financial Moves: Now that your tax returns are filed, take some time to consider your overall financial situation. Maybe you got a sizeable refund or owe taxes. Use this opportunity to make smart financial moves, like contributing to your retirement account, building your emergency fund, or paying off debt. By taking these steps, you can secure a better financial future for yourself. It is also a good time to consider bringing on a financial advisor to help you. In my opinion a fee-only financial advisor who doesn’t sell any products can provide you with the most objective, unbiased advice. Find fee only advisors at NAPFA or at XY Planning Network.

Conclusion: Filing your taxes is a significant and necessary part of adulting. With some planning, you can make the process a little easier for yourself. Congratulations on filing your taxes! By checking your refund status, organizing your financial documents, planning for next year, celebrating, and making smart financial moves, you can make the most of your post-tax season. Take some time to reflect on your financial goals and find ways to achieve them. Good luck!