I hate tax time. I don’t usually have anything to look forward to as far as getting money back because of being self-employed. So, I do all the work, usually, just to pay them. Doesn’t sound fun, am I right? Anyways, yes, we all hate tax time due to the paperwork but it’s truly not as hard as it seems. Here are a few tips to beating those taxes.
- How Do I Know Who to Trust? – If you’re getting your taxes completed by somebody else, don’t just walk into any tax office you see and trust them with your information. I can’t tell you how many people have to file an amended tax return every year due to incompetent companies. It’s worth the time to research a trusted place/company specifically for your type of taxes. If you are self-employed like me, going to Walmart for your taxes is most likely a bad idea. Research or ask around for somebody who is knowledgeable in that area. Googling makes things easy these days as well.
- Can I Do Them Myself? – If your taxes aren’t overly complicated (i.e. you’ve lived in 6 different states during the year) then I say get to it! No need to waste the money on having someone else do it if you can do it yourself. There are multiple free tax programs online and they make filing your own taxes fool proof. They ask the question and you answer, it’s pretty cut and dry.
- How Do I Know What I Can Write Off? – What you can write off depends on your job, etc. I’m self-employed so I can write off the miles I drove in connection with my job, anything I bought to use for my job, I can even write off part of my house bills if I used a portion of my house as an office or work area. The best way to know what you can write off is to talk to a tax professional OR (since they can be tough to call) a quick Google will often help you out with everything you’re allowed to write off.
- What Will I Need? – This will depend on the type of taxes you need to file. For me, I keep receipts throughout the year for everything connected to my business. This means you will need to figure out expenses, etc. before filing. However, if you aren’t self-employed, collecting the W2s from every job for every person who will be included on the taxes, 1099 forms for untaxed income you earned, 1098T forms for any college paid for out of pocket will be needed. Often, if you begin filling out your taxes yourself, it will tell what you need along the way and you can save it and go back in when you have it. If you are having somebody do them for you, you can call ahead of time and they should be able to give you a list.
- Stay Organized – Throughout the year, having folders or some way to organize your papers is important. Especially if you’re a business, you will need to separate receipts, payments received, etc. If you wait until the end of the year to compile all of it, I guarantee you not all of it will be there and it will make tax time really stressful.
- Where’s My W2? – I’ve had this issue occur before. When I used to work for someone other than myself, I had to wait for them to provide me with a W2. DO NOT attempt to fill out your taxes based on pay stubs that you collected throughout the year, for whatever reason, it’s never correct. By law, the people in charge of sending you a W2 for the year have to have it postmarked by no later than January 31st. If it’s March and you still have no W2, you need to contact HR for that company. Sometimes, getting firm with them is necessary and I’ve been there a few times. Yay for self-employment.
- Don’t Be Afraid to Ask – If you don’t know how to answer a question or you’re unsure if something will count, ask. Sometimes, the answer will surprise. I almost didn’t ask one year and because I did, I went from owing to not owing just like that. Be thorough, it’s worth it.
- Be Aware of Deadlines – All taxes must be submitted by April 15th. If you owe an amount for your taxes, it must be paid in full by the same date. It’s ok to put them off until the last minute but just be aware that things go wrong often with taxes and it can make it a pain in the butt if you don’t just buckle down and get them over with. Besides, it’s around $20 a day if you’re late. Extensions can be filed and are often accepted but who wants more paperwork?