“The only difference between a tax man and a taxidermist is that
the taxidermist leaves the skin.” – Mark Twain
Like it or not (and in most cases, NOT), you must pay your taxes. It is the law. Parting with your hard earned money can be painful, and the entire tax process can be complicated for those not well versed in tax code.
This year the dreaded tax day is Tuesday, April 17. Many Americans will only start filing their taxes the night before. But waiting will only give you a headache and potentially make you late. If you want a stress free tax season this year, follow these expert tips.
- Start early. You do not need to wait until April to start filing your taxes. In fact, that is the high tax season, so you will likely wait in line with everyone else trying to file. Beat the rush and start filing your taxes early. You should start receiving your W-2s and 1099s by the end of January. Start gathering and compiling everything you might need to file your taxes and keep the docs in a safe folder. Make sure you do not lose those items. My W-2 has a $15 replacement fee if lost. Once you have all of your docs, schedule an appointment with a tax agent or accountant. Give yourself a pat on the back for being so proactive.
- Hire a professional. If you have a simple tax return (i.e. one job, not deductions), you can probably file the taxes on your own. However, a CPA (certified public accountant) or tax pro (think Liberty Tax) can help you navigate the confusing waters of filing your taxes. If you freelance or have a lot of tax deductions, you might want to have a professional help. the IRS historically audits more self-employed tax payers than others, so make sure you have everything correct in your books.
- Save you receipts if you plan to itemize your tax deductions. This is a MUST. A big one is for charitable contributions. You cannot be taxed on charitable contributions, but you must be able to prove it with either a receipt or bank statement if it is under $250. If the donation exceeds $250 at one organization, you must have a written receipt from the charitable organization.
- Deduct your insurance. This only applies if you are itemizing your taxes. But home owners insurance and health insurance costs are deductible, meaning you do not have to pay taxes on the money you spent.
- Run out of time? Do not NOT pay your taxes. Not paying your taxes is called tax evasion and is against the law. It always steams me when celebrities are charged with tax evasion. We all fall under the same law and need to pay. This year, we have two whole extra days because April 15 is on a Sunday (and April 16 is a holiday in Washington, go figure). But if you cannot file on time, you need to file for an extension. Only extend if you need more time to file.