It’s that time of year again. The time when you’re scrounging around for all those documents and receipts and trying to scrape up every last bit of information that will increase your likelihood of getting a refund.
That’s right. It’s tax season.
Inwardly, you may groan to yourself as you think about sitting down to work on them. You may also think about putting it off since the government has pushed back tax filing to July 15th as part of an economic package due to COVID-19.
But why wait? You may already be stuck at home more than you’d like. Might as well get ahead on a few important chores including taxes, especially if you’re expecting a refund. Even if you have to pay, it can benefit you to know how much you will owe now. That way, you can save money over time so you can take care of it in July.
Filing can be easier than ever with a few tips and tricks.
You aren’t alone when you feel that little prick of anxiety every time you think about filing your taxes. According to The American Psychological Association, financial anxiety related to paying bills, filing taxes, and organizing accounts is the number one source of stress for most adult Americans. This stress is not only bad for your mental state, but it can also deteriorate your physical condition, especially if you are already dealing with an underlying health issue.
Being broke isn’t easy. Finding ways to make ends meet can be a real challenge for most people who have low to middle income. Being unsure whether or not you’re getting a refund can add to that stress. Most Americans struggle to pay large lump sums because they just don’t have the savings built up. If you do owe, it is possible to set up a payment plan to help you get through it.
There are a number of steps you can take to help you relax a bit about taxes. The first is not to procrastinate. Being rushed can cause you to miss refund opportunities that could benefit you. Second, use free tax filing software; the IRS provides it for anyone making less than $62,000 a year. Finally, don’t let tax issues build up. Talk to free experts who can help you through filing and provide advice for making payments or qualifying for financial hardship.
Getting organized and biting off small chunks is the key to getting taxes done in a timely manner. Start by making a list of everywhere you should be expecting documents from or a list of all the documents you know you’ll need. If you’re a small business owner who is filing taxes, it can be really beneficial to bring in a consultant since there is so much to keep together.
Understand your deadlines. Typically the deadline for taxes is April 15th but, as previously mentioned, 2020 is different due to COVID-19. Procrastinating and failing to file on time is a 25% penalty. Even with the later filing date this year, it is possible to file for an extension if you’re worried you won’t have everything ready to go in time.
Next, take time to examine some of the benefits you might be missing out on. Many of the free tax filing programs will help you to pick up some of them, but it helps to know what is out there. For example, it isn’t just the rich who can benefit from capital gains tax breaks.
There are some very real benefits to filing early in the modern age. This is due, in part, to cybersecurity. There are plenty of scammers who may try to steal your stolen social security information to claim your tax refund before you can file. In this case, filing early is one of the best protections you have.
Many experts are also warning people about giving tax information over the phone. Scammers have been contacting taxpayers and giving them false information about their social security numbers. When they return the call to rectify the perceived problem, the scammers are able to get pertinent personal information. The IRS never calls about things of this nature.
In addition, tax technology is changing, and with this come a number of growing pains and kinks that haven’t been fully worked out. Unfortunately, for all the benefits these advances offer, there are some very real risks including losing personal information.
Filing your taxes isn’t ever fun, but it doesn’t have to be extremely stressful. Take time to get organized and understand what tax breaks you might qualify for. And no matter what, always take necessary precautions and never give out your social security number to suspicious sources. By doing these things, you can make filing your tax return as stress-free and safe as possible.
Guest Author Bio
Magnolia Potter is a muggle from the Pacific Northwest who writes from time to time and covers a variety of topics. When Magnolia’s not writing, you can find her curled up with a good book.
Blog / Website: Magnolia Potter