It's that special time of year when you take stock of your job, your living sitch, major
purchases, and even your relationship.
And then, turn it all into math!
Love doing your taxes just as much as we do??
"Help me, I'm poor."
We've tapped the pros on how you can avoid mistakes and rule tax season.
Choosing the wrong tax pro
If you're hiring someone, make sure they know what they're doing.
"OK lemme explain.
This is your tax return."
"OK."
Randall Brody, an enrolled agent and owner and founder of Tax Samaritan says,
"Choosing an under-qualified tax preparer or one that is more focused on providing you
with the highest refund without consideration of filing an accurate return could easily
put you in hot water."
Not staying on top of it
If you're self-employed, it's especially important to stay on top of your taxes throughout the
year.
But even if your taxes are automatically deducted from your paycheck, it's your job to make
sure your employer is withholding the right amount.
Jeffrey A. Schneider, an enrolled agent and certified tax resolution specialist says,
"The most common mistake...is not withholding enough [from] paychecks or not making estimated
tax payments."
"The taxpayer can be subject to the underestimation penalty.
This is based on what should have been paid with each estimate and was not."
Pay those quarterly taxes, and you'll skip the late fees.
Lowballing yourself
In order to make the most of your charitable deductions, keep your receipts and take pictures.
"Here my friend.
Take it."
Schneider says,
"You need to have the receipt from the organization and you should also have a list of everything
you donated."
Melinda Kibler client service and portfolio manager with Palisades Hudson Financial Group
says,
"Whether you dropped off a bag of clothing at a local charity, or donated five dollars
at the cash register of your grocery store, you should be tracking all of these contributions."
And her pro tip?
Using the standard mileage rate of 14 cents per mile for the drive you made to make your
donation, plus parking fees and tolls.
Ka-ching.
Not itemizing
Instead of taking the standard deduction, save your receipts and itemize!
Jacob Dayan , CEO and co-founder of Community Tax says,
"For some taxpayers, a significant amount can be saved each year by itemizing deductions."
"This includes homeowners, those with large charitable contributions, and people with
large medical expenses."
If you own a home, fill out a Schedule A to see if your itemized deductions could be larger
than the standard.
Not saving
Just crossing your fingers that you'll have enough money to pay for your taxes?
"According to science most professional women don't have time for any of that."
Dayan advises making a plan, saying,
"One fantastic way to prepare for tax season is by putting aside money every year for your
taxes.
Even though most companies will already take taxes out of a paycheck...sometimes taxpayers
owe much more than the company deducts."
Well, back to putting money into our piggy banks.
Forgetting job-search costs
On the job hunt?
Kibler reveals you might be able to bank on deductions related to your work search.
She says,
"In order to deduct job-hunting costs, it must be a job search in your current line
of work.
Deductible expenses include costs of a job placement agency, résumé costs, from preparing
and mailing it, as well as travel expenses."
Not claiming extra income
Got a side hustle?
Don't forget to account for that bonus income.
Dayan says,
"Many forget that this income is taxable.
Especially if you have a full-time job and a side gig, be sure to save money for the
taxes on that extra income.
Not paying this supplemental income tax can come back to haunt you in the future."
You are now ready to totally own your taxes.
"We are keeping it tight!"
"It is tight."
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