Tax Season is here! You’ve probably already received your W-2s and 1099s or are patiently waiting for it (companies have until January 31st to mail out your tax forms). The thought of getting a nice chunk of change, or any for that matter, is enough to make anyone smile. I’m sharing a few ways to make the most of this year’s tax season and hopefully get the most bang for your buck!
Ways to Nail Tax Season
#1 Get Organized
If you haven’t been keeping up with your receipts throughout the year, then it’s time to get organized. If you are a standard wage earner with no additional forms of income or investments, then you likely don’t have much to organize. However, if you have more than one job, a side business, investments, multiple donations, or rental and royalty income, it can make a big difference when you’re organized.
If you work with a tax professional, they will request a hefty list from you. This is where staying on top of your paperwork pays off. Take a Saturday morning or afternoon to compile all of your paperwork and potentially-needed information and keep it in a place that is secure and easy to remember. You should also set up a Financial Filing System to make your life easier moving forward.
#2 Know the Deductions that Apply to You
Do you make student loan payments? Did you move for work this past year? Did you donate to charity or volunteer? If you answered yes to any or all of these questions, then you’re eligible for potential tax deductions or credits. When you’re knowledgeable about the deductions available to consumers, you can take advantage of such deductions and get more money in your wallet. Check out Tax Deductions to Take Advantage Of for a list of common deductions.
#3 File Early
The early bird gets the worm. It’s important to file your taxes early so you don’t rush at the last minute and make unnecessary mistakes. The deadline to file personal returns is April 15th, but it’s preferred to file well before that date. Businesses must file their returns by March 15th. If you file early, you will get a faster return! This will also help you avoid any reason to file an extension when doing your taxes. If an extension is needed, the IRS allows you to file by October 15th, however any tax that’s due is subject to fees and interest.
#4 Use the Right Service
Your tax situation should guide your choice of filing service. If you are young, no kids or dependents and have one source of income, TurboTax or TaxAct are great options. They are simple, easy to follow and understand, and show which deductions you may be able to take advantage of. The more complicated your situation gets, the more assistance you may need. Check out the reads Which Tax Preparer is Right for You and DIY Taxes for some more information on the options available to you.
#5 Spend Your Refund Wisely
When everything is all said and done and your return has been filed, you can officially wrap this year’s tax season up the right way by spending your refund wisely. As tempting as it may be to hit the spa, buy a bag, or take a trip, you can get so much more for your money if you pay off your debts or put that money into a savings account. If you need some more inspiration on useful ways to spend your refund, give the article 7 Things to Do With Your Tax Refund a read!
Don’t wait until next year to get on par with filing your taxes. Form the positive habits you need now so that you can do everything right in the future! Your situation will only get better and your income sources should increase (we hope), so get on track as early as you can. How do you make the most of tax season? Do you have any tips or guidelines you follow when it comes to filing? Share your tips and experiences by leaving a comment below!