Expert Tips for Doing Your Taxes Properly

As the tax season is approaching, it’s wise to start thinking about how you’ll handle your taxes properly, especially when there are new tax acts going into effect every year. There are so many things that you need to keep track of, so it’s best not to wait until the last minute to plot your best course. Making mistakes on your tax returns, whether intentional or not, can result in fines or other legal problems. Whether your financial situation is straightforward or more complicated, it pays to be informed and do all you can to reduce your tax bill.

Make Sure That Your Paycheck is Correct 

It takes a bit of time for the IRS to revise the withholding tables, so you’d better double-check your paycheck to see the withholding amount on your pay stub this year. If your pay stub indicates that you are not having enough tax withheld from your paycheck, you’ll have to pay extra at tax time. On the other hand, if you have overpaid this year, you will get a refund, most likely every week. You can also use the IRS tax withholding estimator to check if the amount of tax being withheld from your paycheck is correct, especially if you are in the case of two-income families, or you work two or more jobs at different times of the year. 

Hire a Tax Professional to Assist You

Some tax cases can be more complicated than others, especially if you have experienced a major change in your life for the past year, such as getting married, divorced, or starting a new business. To avoid tax nightmares in these cases, don’t wait until the last minute, but consider hiring a CPA or tax professional to file your taxes. The later you leave it, the more likely it will cost you as many professionals charge more as the deadline closes in because they know that people are desperate.

Use an Online Tax Advisor or Software

If you are not confident in doing your own taxes, but can’t afford to go to a CPA or tax accountant, there are alternative options that won’t cost you an arm and a leg but are equally effective. The tax whizzes at Keeper Tax explain that online tax services can do an amazing job at organizing your calculations and leaving you stress-free and confident that there aren’t any mistakes on your form. They can scan your past purchases for write-offs and seamlessly export your savings through any platform that you prefer. These online services can help you save thousands at tax time and relieve all the burden from your shoulders.

Keep Your Beneficiary Designations Up to Date

Even though the beneficiary designations don’t affect your taxes now, they may affect the taxes of your dependants in the future. Tax time is the best time to review your beneficiaries and make any changes that will benefit your family. This is important because if you pass away, properly coordinated designations can have a dramatic effect on your family’s inheritance tax bills.

Max Out Your Retirement Plan Contributions

If you have been hesitating about funding your retirement account, now is the best time because they will reduce your taxable income for the year, which means your tax bill will decrease at the same time. Whilst this is clearly beneficial, you should be aware that you will owe taxes if you choose to withdraw the money early. The contribution limit increases every year, so if you have more than a few thousand to save, it’s wise to keep yourself updated about this limit.

Be Aware of Tax Scams and Fraud

Every year during tax season, people are likely to get more calls and emails from entities claiming to be the IRS. It’s important to know that organizations like the IRS are never going to call you on the phone. U.S email is the only way you will be contacted unless you go into litigation. Scammers often make “shopping a refund” calls, in which they promise to get you a bigger tax refund. Don’t forget that once you sign the returns, you are responsible for any bad information, whether it’s a scam or fraud, so make sure anyone you hire to prepare your tax returns are well-credentialed. A safeguard you can take is via direct deposit with the IRS, whether you owe them money or expect a refund.

Doing your taxes is never the easiest or most enjoyable thing in the world, but it’s also unavoidable. A little confusion or an accidental mistake can end up costing you time and money. When it comes to doing taxes, it’s important to utilize all the resources you have, or even ask for professional help if necessary. Even if your financial structure is simple, it pays to do your taxes in advance, so you won’t have to do it in a rush and miss out on useful deductions.