It’s that time of year again! That time when we all roll up our sleeves and dig through receipts and paperwork for the prior year so we can all make sure we file our taxes. Naturally, it’s not a time most people enjoy, nor do we enjoy having our hard-earned dollars flowing out of our bank accounts.
If you are like most who are trying to get their taxes filed this year, you are probably feeling stressed, overwhelmed, and tired. Luckily, we have some tips that can help take some of the stress out of filing those taxes.
The first thing you should do when it comes to taxes is to become aware of the deadlines you are working with. This year’s deadline for filing personal tax documents is April 18, 2023, but there are other deadlines you will want to be aware of if you own a business. For example, S Corporations and partnerships both need to complete their filings by March 15. Being aware of these deadlines and adhering to them can help you avoid penalties and interest payments. If you feel you cannot file on time, be sure to talk to your accountant about filing an extension.
After you have your schedule, it’s time to gather all the paperwork you will need to file your taxes, starting with the documents that help you declare your income for the year. Some examples of these types of paperwork include W-2s and 1099s. You should also gather any documents related to tax deductions you plan to use and your receipts and proof of charitable donations and healthcare payments.
One of the easiest things you can do to eliminate stress is to make sure your paperwork is completed the right way before you send it off to the IRS. If you have your paperwork filed by a professional, be sure to look over everything to ensure its accuracy before you sign off on it. Here are some things you should review, according to the IRS:
· The spelling of your name
· Bank account and routing numbers
· Social Security numbers
After all the hard work is done and you’ve finally gotten that tax refund in your bank account, the real planning begins. It can be tempting to completely spend whatever refund you receive, but there are some other options you might want to consider.
Some great options include paying down on high-interest debt, investing for the future, or placing a portion into a savings account. Depending on the amount of your refund, you may also want to consider adjusting your tax withholdings on your paycheck so that you pay fewer taxes throughout the year. While this will lower the refund you receive next year, you will enjoy having more of that money throughout the year instead.
For those who are not receiving a refund and who are being required to pay in money instead, now is also a good idea to consider adjusting your withholdings or making plans to pay estimated taxes throughout the year. Both options can help you avoid needing to pay an enormous bill come tax time next year.
Tax season is something taxpayers must deal with every year. Being prepared can help eliminate the stress that usually comes along with filing taxes. Following these tips can help you achieve peace and tranquility this tax season.
· Check out the tax deadlines for your filing status.
· Start gathering documents as soon as possible so you are ready to file your taxes.
· Look over your finished documents for accuracy before filing them.
· Take steps now to plan for next year’s refund so you can use your money wisely.