Benjamin Franklin famously said, “The only things certain in life are death and taxes” and come this April, the citizens of our country will be hustling to get their taxes done on time. Tax season doesn’t have to totally stress you out every year. Proper planning and the right attention to details, you can be done before that “famous” day gets here. Here are some tips on how to “keep calm and keep moving,” while avoiding headaches during this hectic time.
1. It’s the 21st Century – E-File
E-filing is one of the best routes to take when doing your taxes on your own. In the US, there’s Turbo Tax and in Canada there’s EFILE. In both cases, you can get professional input on some of your burning questions. It also saves a tremendous amount of time – and you can save a tree or two in the process.
2. Pay attention to your exemptions
Exemptions are the government’s way of giving a little back to the hardworking citizens of our country. If you’re married, have children, or are a contributing member of society you qualify for exemptions, you can save thousands of dollars.
3. Be sure to file the proper status
Your status when filing is extremely important to the Government. It lets the taxman determine your filing requirements, standard deduction, eligibility for credits and deductions, and your correct tax rate. Filing under the improper status could cost you thousands of dollars in improper taxes and even keep you from getting the proper deductions.
4. Learn from Last Year
Mistakes become less painful when we don’t repeat them. A quick look at last year’s tax documents will ensure that you don’t miss out on any opportunities that you may be missing. Each year’s tax paperwork leaves clues and you should use them to ensure that you don’t miss an important deduction, or worse, pay more than you’re supposed to.
5. Deductions are your friends!
Like exemptions, deductions are the Governments way of reducing your total taxable income. Your filing status and your type of employment govern what deductions are allowed under the law. Be sure you are aware of every deduction available to you when you file by checking www.irs.gov for those in the United States and www.cra-arc.gc.ca in Canada. Even a little bit of research could save you money.
While this list is certainly not all-inclusive of year-end tax planning strategies available, you should check with a tax professional regarding your own, personal situation. A little planning can go a long way in helping you save money. Please note that the information provided here is not intended as tax advice.