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Save Money by Being Prepared For End of the Year Taxes

Posted In:  taxes

The surest way to save money at tax time is by being prepared for end of the year taxes. This means taking the time to do several things that will make preparing your taxes easier for yourself or anyone you are planning to pay to do your taxes this year. No matter what your strategy being organized will definitely save you time and money, which is good news to anyone during tax season.

Getting Organized

In general, most people will benefit and save money on their taxes by getting their financial life organized. This may mean many things depending on the individual, but mainly this refers to having a budget in mind, using better money management habits and making some kind of system to organize tax relevant paperwork. If you are like most of us, this is already a problem left long overdue. Start with the basics and if necessary elicit the help of someone who has more expertise in the area of financial management. Remember that organization takes time and is a gradual process for most people.

Try to do these simple steps and you will find they are helpful in most situations. Outline what you think are your basic expenses monthly and begin organizing what records you have into these basic categories. Separate any paperwork that you believe maybe deductible from other things like banking or investment records. Make a file system, even if it is minimal in design and start keeping things like tax filings separated for each year. Also try to make sure you at least have records of all paychecks and taxable income organized, even if it is not perfect. All these steps will be helpful currently and will be more so if you implement them each year down the road.

Saving On Tax Preparation

You can save money on tax preparation in a number of ways, but each requires different levels of involvement and pre-planning on your part as a taxpayer. Above all, remember to begin the tax filing process as far ahead of time as is possible, by doing this you can avoid the seasonal rush, can apply for extensions if necessary, and hopefully will not incur any late filing fees with the government. Early tax filing also makes for an earlier refund.

Your first option is to look at the banks, credit unions, or places you already do business with. There are group and individual discounts that are offered to persons filing their taxes through a bank or tax service, as an already existing customer there are usually benefits to be had. These types of discounts will have various qualifications from age to group discounts, but if you ask there is probably one that fits your demographic when filing your taxes. Some discounts are available by being referred through a customer of the banking institution or tax service.

At this point, you may want to call around and consider if filing through a tax professional would benefit you financially. By going to a tax service, there will be other options like combination packages, unemployment programs, and other deals that are part of the incentive to consider hiring their company for outside tax assistance.

Hiring a Tax Professional

The decision whether or not to hire a tax professional is very individual, but if you are really unsure about how to file correctly, then it maybe the best option for you. The cost you incur by hiring a tax accountant or local tax service will be likely to save enough money to pay for itself, especially if you have already done some of the footwork suggested above.

Tax professionals spend their days doing nothing but learning and executing the tax laws to make money. They do this well for clients, so that they can make a profit for themselves and everybody stands to benefit. Hiring a tax professional can be very beneficial in cases of tax problems, liens, bankruptcy or other financial matters, and they will be able to help you decide upon the best course of action in legal matters. The best reason to hire a tax professional is that tax law is their job. Their expertise is at your disposal by hiring them.

The more organized you are ahead of time, the more money you will potentially save when it comes to filing taxes this year. Being actively involved in your tax preparation will always save you money, no matter if you file for yourself or hire a professional tax accountant to assist you. These skills are good for personal money management in every area of your life and all throughout the year, not just at tax time.

Jessica Bosari is a freelance writer and blogger for various publications and her own blog. You can read more of Jessica's work here. If you have any comments or questions about SavingTools or about saving money, leave your comments in the form below or email jessica@savingtools.com. Thanks!

 

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