When it comes to doing your taxes, do you feel a little taxed out when all is said and done? If so, you’re definitely not alone.
As the old saying goes, the only two things guaranteed in life are death and taxes.
With that wonderful thought in mind, are you having trouble getting your taxes done on time? If done on time, are you now getting heat from the IRS?
For far too many individuals, tax season is nothing to celebrate.
Start and Finish Early
Even though it may be too late for this past year’s taxes, getting a start on your 2016 earnings for next year is certainly an option.
So, what are some things you can begin doing for next spring to make your life a lot easier?
- Keep and record your financial documents – First and foremost, don’t leave receipts and other important financial documents scattered around your home, vehicle, business etc. You can make your life so much easier (and that of your tax preparer’s if you use one) by keeping all financial data in an easy to find folder or on your computer. Along with your work pay stubs, be sure to maintain a file for house repair receipts, mileage that you can deduct for items like meeting clients or attending conferences for work, doctor appointments, contributions to retirement accounts and more. Also have available items like costs for medications and proof of health insurance for the year. Maintaining all this data in one easy to find folder (off or online) makes things so much easier when it comes time to crunch the numbers;
- Resolving disputes – In the event you’ve had a dispute with the IRS, get it resolved sooner rather than later. Such disputes have the potential to linger on for periods of time, something which can end up costing you more money in the long run. If you need a tax attorney in Rochester or elsewhere in the country, get with them to help you resolve the problem. Their experience can be quite helpful, especially when it comes to the legalities of tax codes and more. If you owe the IRS money, remember that they are charging interest, so that amount will only grow unless you settle the matter. Not settling the issue can also lead to a garnishing of wages;
- Getting an earlier start – While you may be known as a procrastinator, doing such with your taxes typically only leads to frustration and anxiety. As a result, start now on your 2016 tax responsibilities, avoiding the mad dash to get them done by next April 15. As mentioned earlier, filing away all the important documents as you get them makes much more sense than having to dig for them a week or two before next April 15. If you are self-employed, remember that you are responsible for your own contributions towards government programs. One way to address this matter is by setting aside money each quarter (four quarters) of the year, then sending the IRS a payment. In doing so, you cover your responsibilities for Social Security and Medicaid. If you’re not sure how much to send each quarter, get with your tax preparer. He or she can give you an estimated amount to be sent each quarter (this figure comes from approximately how much money you expect to earn as an independent contractor during the calendar year). If you do not send in enough money during the year, the IRS will expect you to pay the difference. If you send in too much, you will be eligible for a refund next spring when doing your taxes;
- Avoiding stress – Lastly, while doing your taxes is not exactly a picnic, don’t look at them as the worst task you will ever be asked to do. There are more online programs available these days that basically do your taxes for you. You also have the option (for a fee) of going to a tax prep service and having an expert go over your numbers and ultimately file your taxes for you. Simply keep up to date during the year on your finances, pay stubs, receipts that are eligible for home or business deductions, allowing you to avoid the stress come next April.