Tax filing time is coming and you have no choice but to face the music. Talking of taxes, you have to face it eventually so there's no reason to procrastinate.
We don't like it and will not welcome it but taxes are a fact of life that we have to live by. Having accepted the inevitability of taxes, you might as well start doing this current year, and prepare for the following year as well. Make this as pleasant as possible next year.
Now, if you and your spouse each have jobs rather than businesses, your employer has handled the bulk of the paperwork as far as paying taxes goes. You just have to know what your deductions are. If you're only taking the standard deduction, you may be paying too much, sometimes quite significantly. If you have doubts on the correctness of the deductions, you can consult an accountant or, where you are doing your own calculation, you can go to the internet for information reference. A business income tax is more complex and may prove too much for most individuals. In this case, they have no option but to ask help from an accountant. You'll realize that the expenses of passing on the burden is well justified. You can deduct in many cases for your home office, business supplies and more. Consult with a tax professional, and be sure you have receipts for everything in case you are unlucky enough to be audited.
After you filed you income tax return and get a notice in return that you overpaid by a large sum, would you be 100% happy? Not exactly. A refund notice also means that you are in effect lending money to the government without due compensation. Surely you could have used that money productively. Your tax refund is unexpected income that you have not taken into account in your expected expenditures, so you can afford to convert it into some kind of savings or reserve fund. Even a plain savings account in a bank pays more than nothing, and you're still getting the advantage of money saved up. This is one of those things that are easier said than done, because it would be difficult to keep your hands away from that money that in the first place is not supposed to be there at all.
Words of advice - systematize your income tax starting now and avoid frantic improvisation in the future. For one, you should start keeping an orderly file of your receipts and records so you can have documentary support for your deductions if and when necessary. And by the way, do you know that a tax expert can actually maximize deductions that will reduce your tax payments?
We don't like it and will not welcome it but taxes are a fact of life that we have to live by. Having accepted the inevitability of taxes, you might as well start doing this current year, and prepare for the following year as well. Make this as pleasant as possible next year.
Now, if you and your spouse each have jobs rather than businesses, your employer has handled the bulk of the paperwork as far as paying taxes goes. You just have to know what your deductions are. If you're only taking the standard deduction, you may be paying too much, sometimes quite significantly. If you have doubts on the correctness of the deductions, you can consult an accountant or, where you are doing your own calculation, you can go to the internet for information reference. A business income tax is more complex and may prove too much for most individuals. In this case, they have no option but to ask help from an accountant. You'll realize that the expenses of passing on the burden is well justified. You can deduct in many cases for your home office, business supplies and more. Consult with a tax professional, and be sure you have receipts for everything in case you are unlucky enough to be audited.
After you filed you income tax return and get a notice in return that you overpaid by a large sum, would you be 100% happy? Not exactly. A refund notice also means that you are in effect lending money to the government without due compensation. Surely you could have used that money productively. Your tax refund is unexpected income that you have not taken into account in your expected expenditures, so you can afford to convert it into some kind of savings or reserve fund. Even a plain savings account in a bank pays more than nothing, and you're still getting the advantage of money saved up. This is one of those things that are easier said than done, because it would be difficult to keep your hands away from that money that in the first place is not supposed to be there at all.
Words of advice - systematize your income tax starting now and avoid frantic improvisation in the future. For one, you should start keeping an orderly file of your receipts and records so you can have documentary support for your deductions if and when necessary. And by the way, do you know that a tax expert can actually maximize deductions that will reduce your tax payments?
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