It's a Taxing Time of Year
Yes, that's right, it's that time of year nobody loves - tax
time! No, this is not too early to think about it, especially if
you have money coming to you.
All right, so it's not fun to think about doing your taxes. But
there is a distinct advantage to getting an early start - it's a
reminder to be more organized in this regard in the year to
come. Make this as pleasant as possible next year.
Now, if you and your spouse each have jobs rather than
businesses, your employer has handled the bulk of the paperwork
as far as paying taxes goes. You just have to know what your
deductions are. If you're only taking the standard deduction,
you may be paying too much, sometimes quite significantly. If
you aren't sure what all you can take a deduction on, consult
your accountant, or, if you do your own taxes, go to
http://www.turbotax.com/ and see what they suggest. You may get
a pleasant surprise. They links to tax tips right on their front
page.
Of course, if you have a home business, you have more paperwork
and more deductions to consider. This is why many home
businesses prefer to use an accountant. It saves a lot of worry
and can be worth the expense. You can deduct in many cases for
your home office, business supplies and more. Consult with a tax
professional, and be sure you have receipts for everything in
case you are unlucky enough to be audited. I am not a tax
professional, so I really cannot give you better advice than
that.
Now, if you've done your taxes and find out you're getting a big
refund, it's time to celebrate, right? Not really. If you're
getting a big refund, that means you gave the government an
interest-free loan. You need the money more than they do, right?
If you are overpaying to avoid underpaying (and who likes paying
more at tax time?), put the excess you were thinking about
paying into some kind of savings account. Even a plain savings
account in a bank pays more than nothing, and you're still
getting the advantage of money saved up. This is far harder to
do, of course, since the money is nicely within reach, but it's
a good practice in general to have some money you rarely touch
anyhow.
Getting your taxes under control now can save you a great deal
of trouble next year and in future years. Build good filing
habits so that if you are ever audited you can easily justify
your deductions. And finally, consult with a tax professional to
get the most out of your tax return.