Some Do’s and Don’ts for this Tax Season

It’s tax time! Exciting, right? Probably not, at least not until you get that return in the mail or via direct deposit (isn’t that the best thing ever?). But, there are some things that we don’t necessarily think through during our tax times. Today, we’re going to look at some do’s and don’ts to help you get through this tax season smoothly.

DO:

  • Pay attention to ALL of your income. Income isn’t only what you make in your paycheck. Did any of your accounts (except Roth IRA’s- they go tax free) accrue interest? Did you make any money on the stock market? Then wait to get your 1099’s from your financial institution. You have to claim any interest that you receive from investments.
  • Deduct non-cash charity donations. I know, it’s a pain. But, especially if you’re someone who gives a lot of clothes or food to charity, you should make sure to itemize them and deduct it.
  • Take that home office deduction. So many people get nervous about this because we’ve been warned it’s a red flag for an audit. But if you work from home at all and have a home office, deduct those supplies! You have a right to!
  • Check your math. Please. Most tax mistakes are because of one number being wrong. Don’t let that person be you.
  • Deduct medical expenses. So many people don’t realize that you can deduct your medical expenses if you itemize. If you have to pay for your health insurance yourself (with no help from your employer) and/or you paid a lot of out-of-pocket expenses because of a lack of coverage, then you can claim them.

DON’T:

  • Just take the standard deduction without calculating. Most of the do’s I mentioned involve itemizing. Most people want to avoid that because it’s “too much work.” But, a lot of software helps you determine whether to itemize or to just take the standard deduction. When I did my taxes a few weeks ago, the program I used had me calculate my itemized deductions (which included almost everything I listed in the Do’s section). It still ended up being less than the standard deduction for a single person ($5,700), but it was pretty close. Imagine if I hadn’t looked and it had been more! So many people overpay on their taxes because they’re too lazy to itemize- don’t let it be you.
  • Get a refund anticipation loan. These things are a waste of time and money. The interest rates are through the roof. With the IRS now offering direct deposit, you can get your refund quickly. I did my taxes in late January and got my refund last week.
  • Unnecessarily go to a professional. If your taxes are simple enough, you can spend the money on a software program and be done with it. Even if you itemize, these programs have become advanced enough that they can help you out. Professionals can cost almost as much as your return sometimes, where software programs are between $20 and $50. Now, if your taxes are complicated, going to a professional is not a bad idea.
  • Take a big refund without realizing why. You may be getting too much money withheld from your paycheck. Use available calculators to see how you should claim yourself according to your income and marital status and you can prevent getting more money taken out than necessary.
  • Miss the deadline. The most obvious don’t of all. April 18th. You can get huge fines and fees and being lazy or late is just not worth it.

This tax season doesn’t have to be as difficult as people make it. Be willing to put some time and energy into your taxes and your return can be maximized with little to no issue. Organization is key, and always seek out help (either online or from a professional) if you truly need it.

  1. Good tips, but deadline is actually April 18th this year.

  2. You’re absolutely right. Thanks for the correction!

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