How To Eliminate the Stress this Tax Season
Filed under: Taxes and Planning
Tax season is almost here, and if you’re like most Americans, you may be feeling the pressure to get your return filed. Filing taxes can be time-consuming, complicated, and stressful. That’s especially true if you’re taking a DIY approach to your tax return, as millions of Americans do every year.
Fortunately, there are steps you can take to streamline the process and eliminate the anxiety. With a little planning, you can make this tax season as painless as possible. Here are a few tips to make filing your returns as stress-free as possible:
Gather your documentation ahead of time.
Half the battle is getting all the documentation you need to fill out your tax forms. As your documents start to arrive in the mail in the early part of the year, store them in a safe and organized location. If you have them readily available when you prepare your return, you will be ahead of the curve in reducing the amount of time you spend working on your taxes.
There are a wide variety of documents you might need. Some of the most common are employer earnings statements, bank account statements, investment account documents and statements related to deductible debt, like your mortgage. You should have all these by the early part of the year. If you’re having trouble finding them all, you can call the administrator for the particular account, and they should be able to help you.
Decide if you need help.
Once you get all your documentation together, you should review it to see if you need help from a professional. The tax code can be difficult to navigate, especially if your tax situation isn’t straightforward. For instance, if you recently went through a divorce or if you own a business, it might be beneficial to get advice from a professional who can guide you through the process.
Even if your return is fairly straightforward, you might simply feel uncomfortable completing your return on your own. There’s nothing wrong with asking for help. If you think you might need assistance, you shouldn’t hesitate to seek it.
Review your spending.
It’s never a bad idea to look at how you’re spending your money. A spending and budget review can provide useful information that can guide future purchasing decisions. But during tax time, reviewing your expenses might actually save you money. There are all kinds of expenditures you may be able to deduct from your return. For example, costs related to child care, medical care, moving, and home improvements may be deductible.
Keep in mind that these types of deductions usually have specific eligibility rules. if you’re not sure what you can deduct, you can always talk to a tax professional. They can help you identify which expenses are deductible and which are not.
Explore additional deduction opportunities.
Just because it’s a new year doesn’t mean you can’t take advantage of deductions for your 2016 return. In fact, some deductions are available right up until April 15. For example, you may still be able to make deductible contributions to a traditional IRA, a health savings account (HSA) or even a 529 plan. Of course, there are limitations that apply to all these accounts, so it’s important to verify your eligibility before moving forward.
Need help organizing your financial picture as you prepare for tax season? Let’s talk about it. Contact us at Ambrose Financial and Insurance Services. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
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16437 – 2017/2/15