Filing your taxes is an unavoidable annual chore. Even though it's stressful for most people, it doesn't have to be. Taxes are just like any other obligation; every little addition counts. Here are five simple steps that can make a significant change in how you file your taxes.
The government often makes changes to taxes and filing procedures. Sometimes, they are small changes that concern a small section of taxpayers, like employers or expats. Other times, they affect everyone, from self-employed individuals to large corporations.
Staying abreast of all the development in tax filing is one of the best things you can do for yourself. There are tons of resources and content dedicated to updating you, from privately managed blogs to service providers like Taxfyle. Take this article, for example. It shows you top courses you can take to become more knowledgeable about filing your taxes.
Tools like mobile apps and software are great ways to stay on top of your taxes. These tools are dedicated to every kind of tax need, from record-keeping to scheduling and deadlines. For example, Shoeboxed helps you track all your receipts and transactions. Its OCR feature analyzes the characters on receipts and records everything.
Another great tool is the tax calculator. These are available on several websites. They help you determine how much you need to pay in taxes, as well as which deductions you qualify for.
Giving to charity is a great way to help the needy. As a side benefit, all your charitable donations are tax-deductible, from the checks to the cash donations. You can also give your items like old toys, books, and even clothes.
Giving your services to charity may also be deductible under specific circumstances. For example, if you sponsor your trip while in service of a charitable event, your expenses may be deductible. However, know that your time itself isn’t deductible, and trying to do so could get you in some trouble with the IRS.
The ratio of individuals who need time extensions to those who request it is low. Most people don't get around to doing their taxes until the deadline is around the corner. Unfortunately, missing the deadline can incur severe penalties.
You can set multiple reminders to get ahead of this trap. But then, to be even more meticulous, prepare to file for an extension. Get the form, fill it out, and make all the necessary preparations. Filing for an extension is free, and you lose nothing by preparing the form. It's much better than having to pay the government even more than you have to.
Some people have no idea how to file their taxes, and they may not need to. They leave it to their spouse, business partner, or other family and friends. If you have someone savvy enough to file your taxes, you need to request their help.
It’s smart to ask them early because these individuals tend to be swamped with similar requests. Also, don’t forget to reward them for all their help and input because everybody’s time is valuable.