Tips for a Stress Free Tax Season
The holiday season has long past and January is also a distant memory. The time for making resolutions is now over and everyone goes back to their regular work routine. However, most people have yet to finish up the responsibilities of the previous year. Now that normal life has returned, it is time to start to think about tax season and how to properly pay your taxes with as little grief as possible. Below please find some tips to ensure you get your taxes completed quickly without too much of a headache.
Don’t Wait but Don’t Rush
It is true that your taxes do not have to be filed until April; however, waiting until April to start is a bad approach. By starting early, you can ensure you have ample time to spare should something come up. Waiting until Tax Day to file will ensure you are stressed and will delay how long it takes to get a tax refund if one is due to you. In addition, there are many issues with filing too early as well. If you jump the gun and file as soon as possible, are you making the most of the deductions you can claim? Also, do you have all your W2 forms and forms from the bank proving what your mortgage interest expense was? It is a delicate balance. You must ensure you have all the necessary forms and information before you file. So spend the extra day or two to ensure you have all the right information so you can file as accurately and efficiently as possible.
How to Get it Done
There are now more ways than ever to file your taxes. You can do it online using software tools, you can pay an accountant, you can do them yourself, or even take them to small pop up tax shops. You can even find a station at Walmart to get them done. Make sure you choose how to get them done wisely. If you are a small business owner, it is recommended to have an accountant do your taxes. There are a lot of tax laws for small business owners and not accounting for all of them could result in you paying more then you need too. In addition, you do not want you or your business to get audited. Having a professional help do your taxes with not only help expedite the process but will help protect you from questions from the IRS. On the other hand, if you are a single individual living in an apartment you will not have nearly as many factors to account for while doing your taxes. You can usually file them online or do them yourself with ease. Finally if you are somewhere in between, a family of four with a simple house for example, it might be easiest to go to a local pop up shop or a tax agency to aid you. There is no wrong way to complete your taxes no matter who you are and what you are claiming, but make sure to think about the best way for you to get your taxes done based on the situation you are in.
Getting a Refund
A lot of people get their taxes done early and start to think about what they are going to spend their refund on. Be careful with this way of thinking. It is never a good idea to spend money you do not yet have. Once you file you will have an idea if you will get a refund and what that refund will be. Do not rush to the store to buy that TV you wanted right away. Wait for the money to be deposited in your account or wait for the check to arrive. Everyone knows someone, whether they know it or not, who has spent their tax refund money early only to have an issue in doing so later. It is easy to over spend and have some financial struggles later on because of it. It is exciting to hear you are getting a refund but be patient and wait until you have the cash to spend it.
Invest in Your Future
Many people do not have a great retirement plan and some people who think they do don’t have enough money set aside. A tax refund is a great way to bolster your retirement savings. Instead of spending your extra money on a material item try saving or investing in it. Is there a start-up company you believe will be successful? Do you have a stock portfolio? Do you have an IRA? There are many ways to invest in your future and a tax refund gives you the ability to begin investing. So think about the best way to utilize the extra cash, it might be nice having a new TV but is that the best use of the money for you and your future?
Take Notes for Next Year
Reflecting on the past and learning from mistakes is a great way to improve future performance. This rule is no different for tax season. Did you lose some important receipts causing you to miss a deduction? Did your business have too much cash on hand at the end of the year? These are examples of simple mistakes people make resulting in paying more taxes then necessary. If you make one of these mistakes or something similar, make sure you learn from it. You might be annoyed at first but that does not help you going forward. Take notes about your mistakes and be prepared to make adjustments during the year and in December to ensure you don’t make the same mistake twice.
No one likes to pay taxes. The government takes your money and it is your social responsibility. It is important to remember that this money is put to beneficial use. It pays for the defense of our county, for the roads and highways we drive on, and for the police and first responders that make our neighborhoods safe. Taxes might suck but they are a necessary part everyone’s social responsibility. It is not a bad thing to ensure you only pay what is necessary. So take your time, make sound decisions, and learn from mistakes. Get your taxes paid and enjoy the benefits of the country you live in.
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