The best time to start filing taxes is now. A helpful way for you to hand in your documents next year is to file W-2s and 1099s in a plastic file holder that is available to purchase at convenience stores.
You can also set an annual reminder on your smartphone in January to remind you that the tax deadline is in 3 months.
You most likely have a busy schedule, and tax preparation is the last thing on your mind. Now that you have one month to get ready, spend one day at a time searching, printing and gathering information.
If you are a college, trade school, or graduate school student, ask if there are volunteers on campus to help students submit tax returns which is a convenient way to file your documents in one place.
Helpful Tax Software to Use
There are reputable tax software and online programs that are easy to use. As you search online to find the one that is within your budget, find out first if it has inputs that match your accounting needs.
If your annual income is less than $64,000, you can contact the IRS to find out more about free software. When in doubt, consult an accountant to avoid missing information or filing incorrectly.
A Part-time Business Can Be a Tax Write-off
The part-time business you had last summer selling your old textbooks might come in handy. Ask your accountant if you can write off expenses such as courier fees and business cards.
The cost for purchasing equipment and office supplies is an expenditure you might be able to deduct. As a result, you ultimately will owe less to the IRS, and it will encourage you to keep doing business this year.
When to Deduct Job-Hunting Expenses
Most millennials are unfamiliar with the fact that job hunting expenses are tax deductible. If you had to move to a new city, it also counts. As long as the new job is in the same industry of your previous jobs, you can claim it.
The following expenses you can add to the list are:
- Dry cleaning work uniforms
- Fees paid to an employment agency
- Courses or certifications
- Printing and fax fees
- Traveling for work
How to Take Advantage of Education Tax Savings
Do you have student loans? You might be able to save money on last year’s expenses.
Educational costs include payments you pay in interest on a student loan or paying for classes for continuing education.
It’s a good idea to set up a meeting with an accountant and review your educational expenses last year. While accountants are professional, there are times when things can be missed. Do your research online and bring a list of questions and items for him or her to review.
You might be able to bring home more money than what you were expecting.
Additional Items to Write-Off
Contributions to Health Savings Accounts grow tax-deferred and can be distributed tax-free when used towards qualified medical expenses.
If you made contributions to your Individual Retirement Account (IRA), that can reduce your tax bill as well.
When you change your mindset about filing taxes, you can take advantage of deductions when you invest in yourself. Owning a part time business, investing monthly in a retirement account or simply paying your student loans will help you save money instead of pay money to the IRS.
Finally, note that this advice is not coming from a licensed accountant. Always seek financial and tax advice from a professional who listens to you needs, and makes recommendations based on your individual situation.