How to Prepare for Tax Season: Early Tax Prep for Small Businesses and Individuals 

Tax season has a way of arriving faster than expected. One moment the new year begins, and the next you are gathering paperwork, reviewing deadlines, and trying to remember what has changed since last year. Whether you are managing household finances or running a small business, early tax preparation can reduce stress and lead to better financial decisions.

This guide explains how to prepare for tax season, shares practical tax preparation tips for individuals and small business owners, and answers common questions, including when you can start filing taxes in Wisconsin and Minnesota.

Why Does Early Tax Planning Matter?

Early tax planning is not just for complex situations or large businesses. It is a practical habit that benefits most people by creating time and flexibility during tax season.

Starting early helps you:

• Organize financial records before deadlines approach
• Review your prior-year tax return with less pressure
• Identify deductible expenses that may otherwise be missed
• Address questions before tax deadlines create urgency

For small business owners, early tax season readiness can improve expense tracking and cash flow planning. For individuals, it provides clarity around how taxes fit into broader personal finance planning instead of becoming a last-minute task.

How Can You Prepare for Tax Season With Better Organization?

Organization is the foundation of effective tax filing preparation. Putting systems in place early simplifies the entire process and reduces errors.

Begin by gathering income documentation such as W-2 and 1099 forms, along with statements related to interest, dividends, or other income sources. Small business owners should also collect key records, including:

• Sales and income reports
• Invoices and receipts
• Payroll and contractor documentation
• Records of business expenses

Reviewing your prior-year tax return can be especially helpful. It often serves as a roadmap, showing what documents, you needed before and highlighting areas where your financial situation may have changed.

Use a Tax Checklist

A tax checklist helps ensure nothing slips through the cracks, especially since documents arrive at different times. While every situation is unique, common checklist items include:

• Income documentation
• Records of deductible expenses
• Proof of retirement contributions
• Charitable donation receipts
• Health-related tax documents

Keeping everything in one secure location supports financial organization and makes tax season more manageable.

Tax Preparation Tips for Individuals

Tax preparation for individuals may seem straightforward, but early planning still provides meaningful benefits.

Track Income and Expenses Year-Round

Consistent income tracking and expense tracking make tax season easier and improve accuracy. This is especially important for individuals with multiple income sources or self-employment income.

Understand Deductions and Credits

Early preparation gives you time to understand which deductible expenses or tax credits may apply to your situation. These can include:

• Education-related expenses
• Healthcare costs
• Charitable contributions
• Certain home-related improvements

Allowing time to review these details helps ensure opportunities are not missed.

Connect Taxes to Financial Goals

Taxes are closely tied to savings, debt management, and long-term goals. Reviewing tax outcomes early can support better decisions related to:

• Budgeting and cash flow
• Emergency savings
• Adjusting retirement contributions

This approach strengthens overall personal finance planning rather than treating taxes as an isolated task.

 Tools to Help Budget and Manage Cash Flow

Want an easier way to see how taxes fit into your day-to-day finances? Manage Money, available within Forward’s Digital Banking, helps you budget, track spending, monitor cash flow, and stay connected to your financial goals all in one place

Why Is Early Tax Preparation Important for Small Businesses?

Small business tax prep often involves more moving parts, making early tax planning especially important.

Separate Business and Personal Finances

Keeping business and personal finances separate simplifies recordkeeping and improves clarity. Separate accounts make it easier to:

• Track income accurately
• Monitor business expenses
• Maintain clean financial records

Stay Consistent With Expense Tracking

Tracking expenses consistently throughout the year reduces errors and saves time during tax filing preparation. It also ensures legitimate business expenses are properly documented and not overlooked.

Plan Ahead for Tax Deadlines

Small business owners often face multiple tax deadlines, including estimated tax payments. Using a tax calendar helps you:

• Anticipate upcoming deadlines
• Manage cash flow more effectively
• Reduce the risk of penalties

Early planning also allows time to adjust estimated payments if income changes.

How Should You Choose the Right Way to File Your Taxes?

One important decision during tax season is how you will file your return. Making this choice early can help reduce stress and ensure you have the right support in place well before tax deadlines approach.

Some individuals and small businesses choose tax software, which can work well for straightforward situations and those who feel comfortable navigating tax rules on their own. Others prefer to work with a tax professional, especially when finances are more complex or when they want guidance beyond basic filing.

The right option often depends on factors such as:

• The complexity of your income sources
• Whether you own a business or are self-employed
• Your comfort level with tax rules and documentation
• Your desire for planning guidance, not just form completion

If you choose to work with a tax professional, starting early gives you time to research options, ask questions, and avoid last-minute scheduling challenges. It also allows more room for thoughtful conversations about tax planning opportunities rather than focusing solely on filing.

Regardless of the method you choose, deciding early helps you stay organized, avoid rushed decisions, and approach tax season with greater confidence.

When Can You Start Filing Taxes in Wisconsin and Minnesota?

A common question during tax season is when you can start filing taxes in Wisconsin and Minnesota. While exact dates can vary from year to year, both states generally begin accepting tax returns shortly after the IRS opens the federal filing season, which is typically in late January.

Even though filing may not open immediately on January 1, early tax planning ensures you are ready once returns are accepted. Having income documentation organized, financial records reviewed, and your tax checklist completed allows you to file confidently instead of rushing as deadlines approach.

It is also important to remember that state tax systems may update forms or guidance each year. Checking official Wisconsin and Minnesota tax resources early is a simple step that supports tax season readiness and helps prevent delays caused by outdated information.

Review for Accuracy Before Filing

Accuracy matters for both individuals and small businesses, and taking time to review your return carefully can help prevent delays, corrections, or follow-up questions after filing. Even small errors can slow processing or create unnecessary complications later.

Before filing, it is worth setting aside time to:

• Double-check income documentation against your financial records
• Confirm calculations and totals are consistent across forms
• Ensure all required forms and schedules are included

This review step is far more effective when you are not rushing to meet tax deadlines. Early tax planning allows you to review your return with a clear head, ask questions if something does not look right, and file with greater confidence in the accuracy of your information.

Make Tax Prep Part of Year-Round Financial Planning

One of the most common gaps in tax resources is the lack of focus on ongoing habits. Taxes are not just about filing forms once a year. The most effective approach is to treat tax preparation as part of year-round financial planning rather than a seasonal task.

Year-round tax planning includes simple, repeatable practices such as:

• Regularly updating financial records as income and expenses occur
• Tracking income and expenses consistently instead of catching up later
• Reviewing your tax checklist periodically to ensure documentation stays current

These habits make tax season more predictable and far less stressful. For small business owners, year-round planning supports stronger financial organization and clearer insight into business performance, which can inform smarter decisions throughout the year. For individuals, it creates confidence and reduces uncertainty by ensuring financial information is already organized when tax deadlines approach.

Approaching tax preparation this way aligns with long-term financial health, not just short-term compliance, and helps turn tax season into a natural extension of good financial management.

How Forward Supports You During Tax Season

Early tax preparation provides time, clarity, and confidence. Whether you are focused on tax preparation for individuals or small business tax prep, starting early supports better decisions and less stress.

If you would like help getting organized or understanding how tax preparation fits into your broader financial goals, the team at Forward is here to support you. Connect with your local Forward team to start the conversation and take a proactive step toward a more confident tax season.