Saving on DIY Taxes *Guest Post*
Saving on DIY Taxes
By Alek S.
Finally, tax season is over, and we all get to wait another year before going through it all again. Although tax season has now passed, it is always worthwhile to look back and look at ways that we could have made things easier for ourselves, and how we could have gotten the most from our returns. This is especially true if you prefer to do your own taxes, as many people often leave thousands of dollars on the floor from their taxes, while only increasing their own headaches. However, for some people, if they keep organized and focused, doing your own taxes doesn’t have to be such a mess, and can actually be quite rewarding. Here are some tips on how to save money by doing your own taxes…
Keep it simple
The first rule of doing your own taxes is to try to simplify the process as much as can be done. Doing taxes is already inherently complicated, and the tax code does little to help this fact. Why would you make it harder than it has to be on yourself by adding your own complications. To help simplify taxes, go through each step of your tax filing process and look for things that could be done easier. This could be as easy as deciding that you aren’t giving yourself enough time to file, and that you need to start filing earlier than you do. If you’d like a list of ideas that can help you simplify your tax process, check out this article here.
Deduct everything (honestly)
The most important thing to remember about doing taxes is that you can always deduct way more than you think you can. There are all sorts of deductions for food expenses, rent, vehicles, children, energy, and so much more than you probably realize. On top of federal taxes, your state will also offer its own deductions that you can take advantage of. For this reason, always give yourself an ample amount of time to research deductions before filing your taxes. In this instance, it may even be worth it to get some advisement from a licensed tax professional, as they often know these deductions like the back of their hand.
Double check your filing status
Before you know what deductions you can get or what type of taxes you can expect to owe/get back, you need to know exactly what your filing status is. You’d be surprised, but there are lots of people out there who are losing out on money because of their specific tax filing status. For example, most married couples usually have joint tax returns, but they may actually be able to get more back on their taxes if they file separately, depending on the disparity between incomes between the two and the specific deductions that they can itemize. Just make sure to know your options and file in a way that is beneficial to you.
Have a strong organizational system
As we stated above, taxes can be incredibly complicated. If you are doing your own taxes, it will feel even more so. However, the easiest way to combat the tax season stress is simply to keep your head above water and get organized. Make sure that all of your tax forms, W-2s, receipts, invoices, and whatnot are all easily accessible to you and can be clearly calculated. It may even be beneficial to digitize as many of these forms as you can, since then you can use a digital organization method, which may be more efficient.
Plan ways to reduce possible penalties
If you are doing your own taxes, and are not already a licensed tax professional, then you have to accept that there are times when you might have done something wrong. Or, indeed, something beyond your control may have happened that caused you to get a tax penalty, such as a fire that made it impossible to reclaim certain records. In these cases, it’s important to remember that there are certain waivers that are offered by the IRS to eliminate or reduce certain penalties. Examples of these are the first time abatement waiver and the reasonable cause waiver, both of which you can learn more about here.