Tax season is months away, yet, for some, it doesnâ€™t matter how long they have to prepare; they wait until the last minute. Each year, you wait until the remaining days, scramble to get taxes done, and feel nervous. However, automated and digital methods of tax preparation and filing makes tax season much simpler and free of anxiety.
Add a little bit of order and dispel all feelings of anxiety in time to do your taxes the right way. Even last-minute filers can do it quick and easy.
Review Last Year
First, gather your returns from last year. Use last yearâ€™s to refresh your memory regarding sections, and avoid prior errors related to withholding information, carrying over last yearâ€™s return, etc.
A shoebox or a drawer full of disheveled papers is a terrible place to keep tax-related materials. Get orderly, maintaining a file drawer or office area of the home. Most anxiety related to taxes stems from the meticulous nature of preparation. Yet, if you maintain order and keep all related materials in the same place, preparing for tax season wonâ€™t take so long and or such tension.
All the Income
You need to report all of your income or face the potential of attracting a hefty fine. Youâ€™ll need a copy of W-2 statements from employers, wage and tax statements, 1099 forms, etc. Get in the habit of storing hard copies of receipts, canceled checks, income statements, tax credits, business costs, etc.
Account for Job Expenses
Purchased uniforms, laundry detergent, and home office furniture are job-related expenses that must be accounted for in order to gain your due return. If youâ€™re self-employed, itâ€™s especially important to make notations related to expenses. Traveling, lunch meetings, and commercial rent fees are all deductible. Ask a fellow entrepreneur for tips, or hire a personal accountant for help, and when in doubt, keep all your receipts.
Get the Answers
The answers frequently asked questions on the IRS website and access the agencyâ€™s online tax assistant tool. Donâ€™t miss out on potential savings by not making a deduction. Conversely, you may incur a fine if you donâ€™t address something properly. Additionally, pose questions to a personal accountant or glean FAQ content from online resources. Getting taxes prepared and addressed by a professional can cost hundreds of dollars, yet those who wait until the last moments benefit from using accounting software.
Find the Software
A load of free and paid software helps novice money managers learn to budget expenses and prepare taxes. Freelance and small business owners benefit from keeping track of business expenses while easily filing personal and business-related tax forms. You donâ€™t have to pay a lot for software or quick tax preparation. Sumocoupon.com offers savings on a range of sought services and products, including accounting software.
Get Back for Giving
The government encourages private and public business entities donate funds and services to charities. Yet, youâ€™ll need receipts detailing the charity endeavor to get your tax break. Additionally, maintain relevant bank records, credit union statements, and credit card statements.
Use Direct Deposit
Once filed, youâ€™ll want due returns as quick as possible. File for direct deposit from the IRS site. Creating an e-file with the agency and including your banking information is the fastest, easiest, and securest way to get your tax return.
Admit Energy Efficiency
Donâ€™t be quiet about being energy efficient. Adding insulation, energy efficient windows, doors, and roofing materials makes you eligible for tax breaks. The energy-related returns have a $500 ceiling and only $200 may be used for windows, but itâ€™s a great opportunity to save money while investing in quality home improvement.
Thoughts for Next Year
Use a W-4
A W-4 form helps you regulate how much an employer withholds from your paycheck and allocates toward taxable income. If you find that youâ€™re consistently receiving money back after filing returns, you may opt for your employer to withhold less income, thus getting more money throughout the year.
You have the option of filing taxes early and paying by April 15. This avoids late season stress; and, if youâ€™re owed money, youâ€™ll get it sooner.
Are you considering adding a new child to your family? Those who make under $75,000 per year and adopt a child under the age of 17 are eligible for $1,000 in tax returns.
If you have a bad habit of losing or misplacing receipts, consider buying a scanner, which makes lasting digital copies of business transactions, contracts, sales receipts, etc.
Russell Matthews is a personal finance consultant. Always on the hunt for finding innovative ways to save money, his articles focus how family’s can take advantage of technology to improve their finances. Keep up to speed with the latest discounts and coupons on Facebook.