"Need A Prep Talk...Tax Tips You Can Use Now!"
Tax time gets a bad rap. Many people dread it, wait until the last minute and then hurriedly dig through stacks of paperwork, old receipts and feelings of mild panic. However, if you take the time to prepare and get organized, you can breeze through tax season like your favorite series on Netflix. Here are some tips to make tax time easier.
Keep Accurate Records
This is one of those times where an ounce of preparation can save you TONS of perspiration. Start a spreadsheet today and note all of your charitable donations, business, childcare and medical expenses. It will only take you a few minutes per day and will ensure that your records are complete and accurate. Also, in the unlikely event of an audit, you will already be prepared to show exactly what you deducted and why.
Designate a desk drawer that is only for tax-related items. This is where you can put your mortgage and student loan interest statements, any receipts you need to save and things like retirement account and social security statements. That way everything is already in one place and ready for April 15th!
Report ALL Income...Even From Those Side Hustles
These days it’s getting pretty hard to earn enough money from just one job to cover all the crazy expenses of living. Many younger people are picking up a few shifts at a coffee shop on the weekend, driving for Uber or working as a virtual assistant in their spare time. Even though you may think the earnings are “bonus” or nominal, it’s important to let the IRS know
about these income sources. If your employer doesn’t take out taxes because you are a 1099 contractor, it is imperative that you set aside 30-35% of each paycheck and put it in a savings account. It’s tempting to keep it all once you see that money in your pocket, so you may want to have a set percentage automatically deposited in the account reserved for that purpose.