Even when you have been filing your taxes for years, the arrival of tax season can still cause heaps of stress for you. But tax filing doesn’t always have to be a grueling task. By following little-known tips, you can make sure that you breeze through the process without stretching yourself thin.
To help you meet your tax obligations with the utmost ease, here are a few tax filing hacks for individuals.
Check Your Specific Deadline
Tax season usually ends in the middle of April every year. But that doesn’t mean that the deadline is set in stone for everyone. For instance, when your region is considered a disaster area by federal agencies, the IRS may extend the deadline to file your taxes shortly afterward.
If you are facing issues in figuring out your tax filing, learning about specific deadline requirements can take the stress off of your mind. From there, you can get some more time to learn details such as the tax obligations of savings accounts.
Consider Overlooked Tax Deductions
When you are filing your taxes, learning about tax deductions and credits can help you significantly reduce your subsequent tax bill. While tax deductions lower your total taxable income, tax credits give you a dollar amount that you can subtract from the taxes that you owe.
By reaching out to professional accountants who use tools such as Intuit Tax Advisor, you can explore the deductions and credits that apply to your filing. This can help you benefit from policies such as Child and Dependent Care Credit without subjecting yourself to a steep learning curve.
Digitize Your Document Collection
During tax season, you may often hear the suggestion of collecting your financial documents early on. But in the age of digital services, physically collecting and storing these documents can seem like a hassle. For many people, this is what causes them to lag behind in their tax filing.
By using a digital document organizer such as the Everplans platform, you can collect and store your financial information online. When it comes time to file your taxes, you can fetch these details from your phone. For similar services, you can further secure your documents by using solutions such as two-factor authentication.
You Can File Tax Returns as Early as January
If you follow good money management practices such as using an online budgeting app, there are high chances that you may be up to date on your transaction information and financial record for the tax year. In case that holds true, you actually don’t have to wait until the deadline to file your taxes.
It is because shortly after the start of tax season, the IRS allows individuals to file their taxes. For instance, in 2023, the IRS started accepting tax returns as early as January 23. Keeping this in mind, you can file your taxes as soon as you can to minimize delays.
Contribute as Much as Possible to Your Retirement Plan
While learning details such as interest deductions for self-employed individuals can be a bit tricky, other tax deductions such as retirement account contributions are pretty straightforward to understand. These contributions get deducted from your taxable income and lower your tax bill.
However, retirement account contributions have a limit, which means you can only contribute up to a certain amount. In 2023, this limit was $22,500 before employer contributions. By maxing out your contributions, you can simplify your tax filing and reduce the taxes you owe.
Consider Payment Plans if You Cannot Settle Your Tax Bill at Once
If your total tax bill for the year is higher than what you can afford, you should not ignore it by any means. Instead, you can reach out to the IRS to figure out a payment plan for your owed taxes. This practice can save you from the penalties and other repercussions that occur from overdue taxes.
To make sure that you have a clearer picture of how much taxes you can afford to pay, you can calculate your finances through solutions such as the Budgeting Sidekick Journal.
By using these tax filing suggestions, you can instill more ease into this otherwise daunting process. You can also continue following these practices every year to master your tax returns.
