Last updated on December 23rd, 2020 at 01:25 pm
10 Tips for Surviving Tax Season: April is just around the corner, and we’re so excited! Just kidding; not only does April bring rain showers, but it also drenches us in dread. Why? It’s tax season.
Unless you’re an anomaly of a person, you probably find doing your taxes pretty mundane and even overwhelming. While it might not be the most fun time of year, its good to go in to tax season prepared. In this article, we’ll go over ten tips that you should keep in mind if you want to power through your taxes like the boss that you are.
10 Tips for Surviving Tax Season
Understand New Laws
There have been some recent changes to the tax laws, and it’s best to be familiar with those modifications when you begin filing in April. You may have noticed changes to your paycheck starting and February. Take a look at your current w-4 to make sure everything makes sense.
Be Honest About Your Money
You may be tempted to maximize your tax breaks and fudge the numbers a bit, but this is a bad idea. Trust us; it’s not worth the risk. Make sure your numbers reflect the true nature of your finances. It’s best to stay on the safe side and not try to report any bogus business costs.
Get Organized, Now
The sooner you get organized for tax season, the better. Waiting until the last minute will only add more stress to an already teeth-grinding process. You may not have been saving receipts throughout the year, but you should collect any relevant documents and info as soon as possible.
Determine Your Filing Status
Did you get married or have a baby this year? If you’re single, figuring out your tax status is a breeze, but it’s not if you’re claiming head of the household. Children are apparent, but there may be other dependents that you’re reporting this year, including an aging parent or a recovering cousin.
If you’re married, you don’t have to jump into filing a joint return. You’ll want to consider the disparity between you and your partner’s earnings, as well as how many itemized deductions you may have. In this case, run the numbers to determine the best filing status for you.
Check on Your Retirement Status
It’s always a good time to check in on your retirement savings during tax season. If you contribute to a retirement account, it may lower your tax bill, not to mention, improve your future. You want to make sure that you’re capitalizing on the match if your employer offers a 401k or other pension plan.
Maxing out IRA contributions for the year is another good idea. These funds are either partially or fully deductible, depending on your income level.
Giving Feels Good
Give back, but not just because it’ll improve your tax situation. Charitable donations are tax-deductible, and the IRS offers many breaks for donations to nonprofit groups. You’ll want to have an itemized list, though, so hold on to any receipts or bank statements.
Remember Your Credits or Tax Exemptions
Credits and exemptions will lessen the amount of money that’ll be on your tax bill. Unless someone claims you as a dependent, you may qualify for personal exemption.
Many people forget to claim the Earned Income Tax Credit, which is something that supplements low paying work. You may be owed more in credits than you owe the IRS.
Add Up Your Deductibles
Deductibles reduce your taxable income and can be related to work-related meetings, travel, accommodations, or moving charges. There are also deductibles for home office expenses or job hunting-costs. You may be able to claim more than you think.
One common question during tax season is, “should I do it myself?” While self-filing is a good option for many people, hiring a professional can offer valuable peace of mind. There are many low-cost programs, though you may also consider hiring a tax accountant or tax attorney.
According to Good Service Tax Lawyer Ontario, a professional is best for those who have found themselves amid a conflict. A lawyer may also be useful for someone who needs to prepare for an audit. Someone who specializes in taxes can make sure that you stay out of trouble.
Double Check and Check Again
No matter how tired or stressed you are, you have to take a second look at your forms before you finalize and submit your return. You want to make sure every number is correct and accurately reported, so it doesn’t come back to bite you in the future.
Taxes are never fun, but with these ten tips in mind, this April will be a little bit easier. Whether you’re hiring a professional or doing them yourself, you must have an understanding of your return.
- cif number sbi
- Multinational Companies in Bangladesh
- yield to call
- Types of Inflation
- Difference between CRR and SLR