As you prepare to file your taxes this year, you might be feeling a bit anxious. After all, the year has been filled with ups and downs. Fortunately, there are several things you can do to make your tax filing experience at least a bit more joyful. Here are 5 simple tips that can help you get a better grasp of your finances and optimize your tax-related activities for the New Year:
Check your return before you file
It’s important to look over your return before you submit it to ensure that you are not missing any important deductions or credits. This will help you ensure that you are accurately calculating the amount you owe and will save you a lot of anxiety if you are missing something. You can also use this time to make any adjustments that might be needed to ensure a higher refund. For example, if you have overpaid your taxes, you can use this time to have the excess refunded to you. This process also makes it much easier to correct mistakes that you might be making. For instance, if you incorrectly calculated withholding taxes or you forgot to claim a certain deduction, you can fix these mistakes before you submit the return. This will also allow you to better plan for next year, which will save you a lot of time and stress when filing the following year.
Don’t overlook Form 1099-G
Every year, many taxpayers overlook Form 1099-G, which is used to report payments made to certain third parties. These third parties include landlords, real estate agents, insurance agents, and contractors. If you did not receive a Form 1099-G, you can use it to claim back taxes, interest, and penalties that you should not have been required to pay. It’s also a handy tool in case there is any issue with a previous year’s returns. For example, a contractor might have completed the job in previous years but not reported the income to you. If there is an issue with the previous year’s return, the contractor or someone else who did not receive a Form 1099-G can provide you with proof of payment.
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Get on the e-file train
There are many things that could stop you from filing your taxes online for the first time in a given year, including having to wait for your financial institution to sign you up, not having the appropriate internet service, and other similar issues. However, if you have not already signed up for e-filing with your tax preparer, now is the time to do it. E-filing can help you save a lot of time, money and effort. It will also allow you to take advantage of the benefits that come with filing your taxes online. These include getting your refund sooner and having your tax information at your fingertips whenever you need to do some transactions.
Manage your investments for a better tax outcome
Managing your investments for the tax season is a great way to improve your long-term tax situation. A lot of people fail to consider their tax consequences when investing and end up paying a lot of taxes because they do not have a good investment strategy. If you are one of these people, now is the time to make some adjustments. Investing for the tax season can help you get a better tax outcome by boosting your retirement savings. This can provide you with a solid source of income when you are older and you might not be able to work as much due to health issues or other reasons. In addition, certain investments carry a tax benefit that helps to reduce your overall tax burden.
Bottom line
Now more than ever, it’s important to plan for the upcoming tax season. Doing so will help you to maximize your tax deductions and minimize your tax burden. A little planning now can save you a lot of worry and stress later on. Make sure that you take the time to properly calculate your taxes and plan for future expenses. This will help you to ensure that you are as prepared as possible when it comes time to file your taxes.
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