With tax season in full swing, many people find themselves scrambling to prepare all of the paperwork that they need in order to file their federal and state taxes. A lot of times, this can lead to a lot of unnecessary stress. So rather than letting tax season get the best of you, why not use these helpful tips to help you prepare yourself for filing your taxes? Not only will these tips make the process of filing easier, but they can also help you to ensure that you do not pay a penny more to the government than you need to.
Keep Track of Tax Documents
Keeping track of finances and taxes is not always an easy task. This is especially true if you work multiple jobs (for example: banking jobs), are a freelancer, or even run your own business. For this reason, it is a good idea to keep a binder or even a computer file that tracks your income and subsequent taxes paid for the entire year. You should update the file each time you receive a payment, whether it be a weekly paycheck or a check for contract work. Keeping up with this will help you ensure that your numbers are accurate before you file.
Know Your Resources
Before you begin trying to file, be aware of the resources that are out there to help make the process easier for you. This includes tax preparation software, but you can also get help from government and other websites. This can be especially helpful in situations where you are not sure which status to file under, which forms to use, or which deductions to claim. Knowing this information ahead of time will make the process of filling out the necessary paperwork that much easier.
Track Charitable Donations
Throughout the year, if you donate to a charity–whether it be clothes, toys, a car, or even money–this is all tax deductible. This can reduce the amount of money that you end up owing the government come tax time, but only if you have the proper documentation. Save all donation receipts and keep them in your financial paperwork file.
Keep All Receipts
A lot of times, you may be able to write off expenses to reduce your tax liability. This may include anything from that computer you purchased for work or that business lunch that you paid for. Keeping all of your receipts and organizing them in a file will help you make sure that you get every penny that you are entitled to.