Tax time is often stressful, but there are steps you can take to alleviate many of your worries and make filing your personal taxes easier. Following the right steps will also help you stay organized and may help you avoid any unwanted surprises from the IRS. Here are eight weekly steps you can take to help you simplify the process of filing for your personal taxes.
1. Set Money Aside
Even if your taxes are automatically deducted from your paycheck and you do not expect to owe anything, it is still a good idea to set some money aside each week in case you are billed by the IRS. If you are self-employed or work as an independent contractor then you will need to set aside money to pay your quarterly or yearly taxes. Even saving as little as $20 each week for taxes can make a world of difference when it comes time to file.
2. Save Financial Documents
Saving your receipts, bank statements and other important financial documents is an excellent way to prepare yourself for tax time. Although you will not need to save receipts for groceries and other everyday expenses, it is a good idea to keep receipts for major expenses that could affect your taxes. You can adopt the weekly ritual of going through all of your financial documents to find out what you really need and keep tabs on the expenses pertaining to your taxes.
3. Keep Track of Deductions
There are certain expenses you can deduct from your taxes, which can save a lot of money in the long run. According to Bankrate, expenses that may be tax-deductible include donations, home improvements and college tuition. You may even be able to deduct the cost of certain medical and dental procedures from your taxes. It is a good idea to look over and calculate these possible deductions every week so that you can find out exactly how much you can expect to save.
4. Review IRS Regulations
IRS regulations can change at a moment’s notice, and you should check every week to see if there are any new rules that could impact the way you file your personal taxes. IRS.gov is the official website of the IRS and is regularly updated with the latest rule changes.
5. Consult with a Tax Professional
If filing your taxes will involve a lot of complicated steps, a tax professional can help you organize all of your information and make the proper calculations. “Hiring an accountant and consulting with this professional on a weekly basis will allow you to ask all of your questions so that you have a better understanding of your taxes,” said Bowman & Company CPA, PC.
6. Practice Filling Out Forms
If you really want to stay on top of your taxes, you can practice filling out tax forms each week using your most recent financial information. This will also give you the chance to address anything you may find confusing and get the answers you need well in advance. When it comes time to file your taxes for real, you will likely have a much easier time understanding what is required to fill out your tax forms correctly.
7. Review Filing Services
There are services that are specifically designed to make filing your taxes easier, and you can review different services each week to find the best match for you. You can find many of these services online, and some of the best ones provide in-depth information on tax regulations on what is required on each form. Some services can even be used for free.
8. Get Others Involved
Discussing tax-related issues with your family members can be highly beneficial when it comes time to file for your taxes. You can designate a certain time each week to meet with your family members so that you can talk about any concerns and hear suggestions that may give you the solutions to some of your tax-related challenges.