If you are like me, you loathe the dreaded tax season. Being in the entertainment industry, I feel like taxes are extra intense for me. I have to worry about organizing all my receipts, keeping track of each little job and employer, organizing my write offs and more. However, regular taxes can be just as strenuous and with times being as tough as they are, we are all looking for that little bit of a refund to hang on to to help us out. Have no fear, taxes don’t need to be the worst thing to start your new year. I want to give you some tips on how to make tax season and little easier for all of us.
1. Take a Breath and Mentally Prepare
We all know that taxes can be a little overwhelming, so make sure you take a break before you blow. If you know you have a lot to get together make sure you break everything down into small steps. Prepare by making a list and setting up a timeline so you can follow it easily. After you’ve achieved one of your steps, reward yourself with some time in your favorite hobby. Your brain will thank you.
2. Set Up a System That Works For You
There are many ways that people keep track of their records from online spreadsheets to receipts in shoe boxes. No matter how you keep them, its important to create a system to go through it all. An easy way is to get a big envelope and label it with the year you are in. During the year, place all tax-related information in here like receipts for big purchases, business expenses, charitable donations and things like that. Then, at the end of the year, all of your info will be in one place and you’ll be ready to go through and organize. If you are more organizational savvy, then I suggest a filing cabinet with different filing folders so you can split your receipts into different categories so that they are easy to tally at the end of the year.
3. Do Your Homework and Organize Your Receipts
No matter if you file your taxes online with Turbo Tax or go visit your local H&R Block accountant, you need to know what you have and are getting yourself into before you jump in. Make sure you do your homework and have everything tallied before you begin. How much did you make this year? Did you rent or pay onto your mortgage? Do you have dependents? All of these questions are important to have answered yourself before you meet with someone. Even with Turbo Tax, there are going to be questions that need answers. Do your research and find what you need. Organize all of these totals and be prepared. The more you know, the better.
4. Look Back At Last Year’s Taxes
If you used an accountant or tax professional last year, I highly recommend you look them up and have them give you a taxes check list to make sure you have everything you need. Looking back at last year’s filing is a great way to make sure you have things organized and in line. Log on to your Turbo Tax from last year and see what lines you filled out and what you claimed and compare to your receipts for this new filing season. Another important piece of advice is don’t afraid to ask questions. People are out there to help you so don’t feel like you have to go at it alone either.
5. Make A Plan For Your Tax Refund
If you are one of the lucky ones to receive a tax refund, then you better make sure you make the most of it. When you receive that big cheque in the mail, its easy to want to go purchase that big screen TV or go on a new spring wardrobe shopping spree. I suggest otherwise. We all suffer from post-Christmas debt so meet with your local bank and ask to speak to a financial advisor. They can walk you through what to do with your refund to help pay down debt, save for the future or a down payment on a house or car. If you are going to owe money, I suggest seeing that advisor as well to help you plan out your finances for the year to pay off the government and help guarantee a financial success in the new year.
With these tips, I wish you much success and huge refunds! Remember, tax season runs until April 15th so make sure you file before then. You do not want to be caught paying those awful late fees.