Once the old year ends and the new year begins, it marks the time to start thinking about the upcoming tax season. Before you dive in and prepare your tax return, make sure you know about these five steps to help you save money and avoid penalties.

Add to your retirement accounts. If you haven't fully funded your retirement account for 2021, consider adding money. You technically have until the tax return filing date to do so. Making a deductible contribution will help lower your tax bill this year, and your contributions are compound tax-deferred.

Itemize your tax deductions. While it's easier to take the standard deduction, you could save a bunch if you itemize, especially if you're self-employed or own a home.

Organize your records. While organizing all your records might not affect your tax amount, it can help you know what information you still need to gather. Print out a tax checklist and keep all information that comes in the mail such as W-2s, 1099s, and mortgage interest statements.

File and pay on time. If you cannot file your taxes on time, make sure you file form 4868 by April 18, 2022. This form gives you an extension until October 17, 2022. You'll need to make a reasonable estimate as to your tax liability for 2021 and pay any balance along with the request.

File electronically. This option works best if you're expecting a refund because the IRS processes electronic refunds faster than paper ones. Typically, electronic refunds arrive three to six weeks earlier than those sent through the mail. Also, if you have your refund deposited directly into your bank account or IRA, the waiting time is even less.

By following these five steps, you can get a better handle on your tax return. If you need further assistance or guidance, reach out to a trusted financial advisor.

Sources: USAToday.com, Turbotax.intuit.com