Getting Through Tax Season

Tax season is upon us once again. When it comes to your personal finances, tax season is one the most anxiety-inducing times of year. There are so many documents that you have to manage, like W2’s, bank account statements, insurance documents, and dozens of different kinds of IRS forms. All of these financial documents can make your head spin.

But there’s no need to stress out! With a little bit of planning and tax know-how, you’ll not only survive tax season, you’ll thrive in it!

Budget for owed taxes

The first thing you should do to prepare for taxes is to budget for them. Ideally, you should begin budgeting even before tax season starts. Why should you budget? Well, there might be a chance that there’s money you owe in taxes. That’s where a lot of people get caught off-guard during tax season. Everyone is expecting to get money back from their tax refund, but they forget that they might actually have to make additional tax payments to the IRS.

Don’t let yourself get caught off-guard! Months before the tax deadline, try and set aside some money that you can use to pay off any potential tax obligations. If you plan far enough in advance, you could save enough money to pay the bill in full. If you wind up not having more taxes to pay, then good for you! You saved money, regardless.

If you have a tight budget and you’re not able to put away a lot of money, don’t panic. The IRS lets you pay off tax obligations through lower monthly installments. But it’s always easier and less stressful to pay your taxes in full right away.

Understanding tax relief

You shouldn’t let your tax obligations break the bank or bring down your mood. Rest assured that you’re always able to seek tax relief if you’re having difficulty paying your tax debt. Thousands of people seek tax relief solutions every year.

Certain kinds of tax relief you can take advantage of include tax deductions, credits, exclusions, or forgiveness of a tax lien. You may be eligible for one or several of them depending on what your financial situation is. Truth is, the IRS would rather collect some money from you than no money at all, so they’re more than happy to cut you a deal that makes your tax debt much more manageable.

Gather your documents

Okay, so now let’s talk about the process of actually filing your taxes, and how to do it fast and effectively. The first thing that you’ve got to do is gather all the required documents. You’re definitely going to need a W2 from your employer. Businesses send W2’s to their employees every January. Keep your W2 handy and be sure to make photo copies of it.

You’ll need some of your personal information handy, like your contact information, social security number, and household information. You should also have any documentation of income you received outside of your W2. If you don’t have that information documented on record, you could use your bank account statements to calculate how much you earned outside of your main job.

When you have all this information in front of you, you’ll breeze through the IRS forms much faster.

Learn what you need to file

Most folks have to file IRS Form 1040. But the tax form that you file is dependent upon your employment status, marital status, and other factors. Be sure to do research on what IRS form to file for your specific situation.

Remember the deadlines

You’ve got to file your tax return by April 15. Because you’ll receive your W2’s by the end of January, that means you’ll have about 3 months to file your taxes. That’s a lot of time to get all your financial statements prepared, but you can’t wait until the last minute to do so. If you file your taxes early, you’ll be notified earlier about any errors on your filing or any additional documents that you must submit, and you can avoid the obvious tax scams that are trying to prey on your desperation. So basically, the earlier you file your taxes the earlier you’ll get your tax refund!

If you’ve had any major event happen in your personal life that keeps you too busy to handle your tax filing, you can always apply for a tax extension, which usually gives you about 6 extra months to file. Just be sure to apply for your tax extension well ahead of the tax deadline so you can avoid late filing penalties.

Have the right attitude

Yeah, tax season is a drag. But the best way to approach it is with a positive attitude! Just think: you’re fulfilling your obligation as a citizen, and your tax money will go to useful things, like paying for new infrastructure and first responder services. And so long as you file your taxes early and avoid late filing fees, you’re bound to make a little money back on your tax refund!

1 Comment
  1. Reggie Ortiz 3 years ago
    Reply

    New federal tax overhaul = a new set of rules. Luckily, there’s a handful of ways you can lower taxes on your Social Security benefits.

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