Tax Time is Here: Tips For All Life Stages

Can you believe that it is tax time already? I know a few people that have already gotten their taxes done this year. I must admit that I am impressed! I am usually the type that puts off doing taxes until the very last moment. It is just not fun for me! I’m actually nervous about doing taxes this year. This will be the first full year that I have only my self-employment income to claim. I was laid off in January 2012, and my unemployment ended some time in 2013. Up until now, I have always gotten a pretty nice tax-refund due to taxes being pulled out of my paychecks. I am not 100% that will happen this time.

There are many, many things that influence how your tax rate falls and whether or not you receive a refund. Did you get married last year? Did you purchase or sell a home? Did you purchase a new car? Did you have a child? Did you retire?

Whatever may have happened, ensure that you get your maximum tax refund or credits. Here are a few tips to help you.

1. Keep Track of Major Business Purchases: Since I run a home-based business, a great deal of my tax depends on putting money into my business. I’m always upgrading photography equipment, or buying new accessories. These things are claimed on my taxes as business purchases. Even smaller purchases like printer ink add up. Keep track of all these purchases throughout the year. And if you feel that you did not spend enough, make one more major purchase before the end of the year.
2. Keep All of Your Receipts in One Place: Keeping up with receipts is key in preparing your taxes. I have a pretty messy drawer in my office where I come home and stuff all receipts. However, I make most of my business purchases online. This makes it easy to access my order history when I prepare my taxes. I pull up my order history on Amazon, eBay, Staples, or other sites that I used throughout the year and make a note of business related purchases in a spreadsheet. Save ink and paper… it is not necessary to print off those receipts at this time.
3. Get Your Taxes Done Professionally: If you are iffy about doing your taxes and you can afford it, get your taxes prepared professionally. A tax pro can make sure that you claim everything that you should. They are also less likely to make errors. Keep in mind that many tax pros charge $300-$500 dollars or sometimes more for this service, but if you can afford it, it is very worth it.
4. Use Reliable Tax Preparation Software: If you prefer to do your taxes yourself software such as TaxAct and TurboTax can guide you through while providing tips along the way. Information is provided on deductions, credits, and red flags as you prepare your taxes. Your return is submitted electronically, which means faster processing.
5. Shred Sensitive Documents: Throughout the year we receive many bills and other sensitive documents in the mail. This increases in January and February as companies send out 1099 forms and other important tax related documents. While you should hold on to these documents for a while after tax time, when you do decide to dispose of them be sure to shred them. Never throw documents containing sensitive information directly into your trash.
6. Claim Allowed Business Expenses & Credits: This is where I fall short. I admit that I don’t know much about allowed expenses and credits. I am also lazy. The thought of putting in so much work figuring it out makes me stress. I disliked accounting in school. LOL. This is exactly why using a tax professional or tax preparation software that helps you along the way is great. You just answer a series of questions and provide some documentation and the rest is done for you.

Do you prepare your own taxes or do you have them done professionally? What are some tips that you would like to share?

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Disclosure: This post is brought to you by Master Lock. I am compensated for my participation in the Master Lock Live Secure Safety Squad. All opinions are my own.