Tax season is in full swing, so it’s time to get all of your finances in order. Very few people find filing their taxes an enjoyable experience, and many feel unprepared about the filing process. Not to mention, with so many changes to how we file taxes, it’s no wonder Americans hate tax season.
If you’re someone struggling to get ready for tax season, here are five tips that’ll help you rock your taxes
Familiarize yourself with the tax forms
The first thing you should do before filing taxes is familiarize yourself with the tax forms. There are plenty of form that are meant to categorize different kinds of workers. You’ll most likely start off with a 1040 form, which is where you calculate your adjusted gross income and file your income tax. In order to fill out your 1040, you’ll need documentation from your employer that details your earnings from the past year. Note that it’s illegal for an employer to refuse to give you a W2 or hand it over after Jan. 31 without a requested extension. W2s are one of the more common tax forms and one you may be seeking from your employer. However, if you’re someone who works contract of freelance jobs, you’ll receive a 1099. With a 1099, you can report any income that isn’t salaried, wages, or tips. 1099s also are given out if you earned more than $600 from your contracted work.
Regularly track any business expenses
Aside from your regular spending and budgeting, be sure to keep track of your business expenses. This may sound like a no-brainer, but people forget to log this information and it’s vital for taxes. It’s tax deductible! And if you use your home or personal vehicle for work, you can deduct travel or repairs on your home relating to your work from your taxes.
Be cognizant of your withholding, potential refund
Your withholding is how much of your annual paycheck the federal government holds back for tax purposes. This past year, the government’s tax plan lessened the amount of withholdings taken out of people’s paychecks in 2018. Though this meant everyone’s paychecks were larger than normal, it also means your tax refund will be smaller. Don’t count on that refund to cover the cost of other things; instead, be prepared to cover anything for your taxes and personal expenses without the refund.
Refer to software, ecommerce assistance
Now that you have all of your documents ready, you’re prepared to file your taxes. However, this can still be a daunting task, especially if you’ve never filed before. Don’t be afraid to buy or seek simple tax software programs or ecommerce accounting services. They’ll help you prepare your taxes correctly and will safeguard you from making any mistakes on your own. Human error can be a common occurrence when it comes to file taxes, so seeking help in any form is a good idea.
When in doubt, hire help
Worst case scenario, if you’re totally green when it comes to taxes, just hire someone to do your taxes for you. There are plenty of companies that’ll provide their services to your for an affordable price. All you’ll have to do is bring your tax documents in to the professional and they’ll sit with you to fill out the forms. If you’re smart, you’ll pay close attention and take notes so that next year you’ll be a tax filing pro.
Tax season isn’t a fun time of the year for many and causes quite the bit of stress for most Americans. However, you don’t have to let it concern you. Be prepared, do your research and know what to do. And, if you don’t know what to do, seek out professionals who can help you.