Well it is that time of year again. Time to look at last years income and file our taxes. For some this is a very scary thing every year. Here are 5 suggestions to help you when filing this year.
1. Make sure you have all of your paperwork together before starting – it is easy to forget that we may have forms coming for things like: Student Loan interest, Home Mortgage interest or even gambling winnings. Make sure you set aside a special place for all of your forms as they arrive so when it is time to do your filing you know where everything is.
2. Use an online filing system. – I personally like Turbo Tax, but there are several to choose from. These systems not only will walk you through nearly every possible tax situation, but they will also save your data securely from year to year so that you can know what things you filed last year and compare what you list this year to last year. It also offers the benefit of not having to fill in repetitive information like your address and social security numbers. And these systems work great for small business owners
3. Don’t forget deductions. – Things like medical premiums, house and student loan interest; even things like buying a hybrid car or upgrading to more efficient heating can be deductible. Take the time to see what deductions you might be eligible for this year.
4. Tax Credits are your friend. – If you have children there are several credits including earned income credit and child tax credit. You can get a credit for child care expense. You can even get credit for your retirement savings. The best part about tax credits is if you can get the money back if you have an overage. Deductions will take you to 0 tax due but a credit can get you money!!!
5. Don’t stress!!! – So many times I see people who are really worried about their taxes. The truth is that for most people going through the process of filing online with something like turbo tax if you have all your information is extremely quick and easy. I can’t begin to tell you how many times I have heard people remark how much easier it was than they feared. And if you don’t understand it or want help there are many places like the senior center or the library that offer free help. Still don’t get it? Don’t be afraid to go to a service like HR Block and have them do your taxes for you.
The key this year to a low stress tax season is to be prepared and not to worry. If you use these tips this could be your best tax year ever.