As a taxpayer, you might feel a little overwhelmed sometimes when tax season comes up.
No one wants to pay any more than they have to, so you always want to be sure you handle everything just right. When it comes to filing your taxes, there are always ways to come out ahead.
When Does Tax Season Start and End?
First, before we dive into preparing for tax season, you may want to know when tax season is. Tax preparers consider January 1 through April 15 tax season. Employers begin readying your tax information from the previous year in early January, and they must have all documentation sent to you by the end of that month.
By early February, you should have everything you need to file your taxes. You have until April 15 to send them off. Some people prefer getting their taxes done as soon as possible, so they know what they owe and can get a head start on paying. Others delay doing their taxes until the last minute. As long as you file by the deadline, you will be fine.
Make Sure Your Documents Are in Order
Many people work just one job and receive one W2. This means preparing for the tax season is pretty straightforward. But other people may work a gig job and could receive multiple 1099s for their labor. Others may have a side hustle based on cash that requires a lot of documentation. And if you inherited money or sold a home during the tax year, you will need the proper documentation to prepare.
Go through your papers before you begin to ensure you have everything you need. Do this well in advance of the April 15 filing deadline. There's nothing more stressful than realizing on April 14 that you're missing a critical document.
Consider All Your Possible Deductions
The U.S. tax code is complicated, but it also allows you to deduct things that may significantly lower your tax bill. Consider these potential deductions — and make sure you have the right documentation to back them up:
- Home office: If you work at home, you can deduct part of your utilities and other home expenses
- Mortgage interest: You can deduct the interest you pay on your mortgage
Always Claim Anyone You've Been Supporting
If you've had a friend, significant other, or additional family member staying in your home for a while, you may be able to receive a dependent exemption of $4,000!
You'll have to make sure you fall under the specific rules for the exemption:
- A non-relative must have lived with you for an entire year (relatives don't have to live with you to count as dependents)
- A non-relative can't provide more than half of their own support
- A non-relative can't earn more than $4,000 in taxable income
If this applies to you, get paid for your hospitality!
Keep Refundable Tax Credits in Mind
The Earned Income Tax Credit is one of the most overlooked tax credits out there. It's worth up to $6,242 for a family with three or more children, yet one out of five taxpayers fail to claim it.
So, when you file your taxes, look over your return to ensure you haven't missed any potential bonuses. If you aren't sure if you qualify, check the IRS's website. You can also consult a tax professional to discuss if you qualify for anything additional.
Declutter Your Life
Make the most of tax season by using it to improve your home. Look around: do you see anything in your home or life you don't need or want any longer?
Odds are there's a charitable organization nearby that would be more than happy to accept items like clothing, books, furniture, electronics, and more.
If you declutter in this way, you can deduct it from your taxes! As long as the value of the items is more than $500, you can file a Form 8283 and receive your deduction.
And on top of your deduction, you can breathe easier without all that unnecessary clutter!
Research the Best Loans for Bad Credit
Tax stress can be draining, even for expert tax minimizers. If you finish filing your taxes this season and feel like you could use a little more cash, you can always consider a personal loan to gain immediate security.
That's where Atlas Credit comes in. Contact us today, and we can provide you with an immediate personal loan.
How to Get a Higher Tax Refund Next Year
- Solar water heaters
- Solar electric systems
- Wind energy turbines
You can get a personal loan to finance these upgrades and save money on your taxes. You will also reduce your energy bills, which can lead to additional savings for many years to come.