Uncle Sam will ALWAYS get his–one way or another! For some, Tax Season means a great big check and a much needed springtime spending spree. Others shake their heads in disbelief at all the money they could have been saving all year long. And a select few fear Tax Season, only to realize they could also be enjoying a larger refund or heftier paychecks! I’m pretty sure I fall into that last category, always worried about the paperwork and which boxes to check, but being pleasantly surprised by the final numbers.
Filing your taxes this year doesn’t have to be overwhelming and complicated. You may want to read back on last week’s Money-Saving Monday blog about ways to organize your expenses. These tips are also very useful when you’re gathering your documents for Tax Season. However, once you’re ready to sit down in front of your tax software, that’s when the numbers start to paint a picture of possible savings opportunities.
1. Claim more allowances – If you feel that too much was being withheld from your take-home payments, it may be time to reevaluate your W-4 form. You can also use a simple Tax Withholding Calculator to estimate how many allowances work best for you to get more take-home each week.
2. Double check your math – When filing on paper, pay extra attention to details, like math, your social security number, and your bank account number. E-filing helps eliminate these mistakes, however the simplest of human error can skew the amount of your refund or stall the time it takes to get to you.
3. Report all income – Scholarships, unemployment, even your fantasy sports team winnings are taxable and shouldn’t be overlooked to avoid owing even more (plus ugly fees) in the future! Check out this list of Surprising Things That are Taxable to learn what else should be reported on your taxes each year.
4. File on time, or file an extension – No one wants to wait to get a refund, but waiting and not filing an extension if you owe can mean awful penalties that take even more of your money. Filing an extension pushes your deadline to file to October 15, however your deadline to pay stays the same, so get started early to avoid any other costly mistakes!
Take it from someone who used to hate tax season, it may seem like a burden, but getting a nice refund in the spring makes it worth examining each detail under a magnifying glass. Hopefully you find this and Kiplinger’s articles useful as you prepare to file for 2014, and I wish everyone a happy, hefty, and timely tax refund!