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It’s Never Too Late or Too Early to Start Your Taxes

It’s Never Too Late or Too Early to Start Your Taxes
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    We are now 15 days into what we all know here in the US as “Tax Season”. And no matter how well prepared you are or think you are for this time of year, fear and overwhelm can definitely set in.

    If you are sitting back thinking to yourself, “I have until April 17th. That’s like, what? Two months, right?” you are the prime case of someone that should start your taxes today. Here is a simple run down to help you get your taxes done before the tax man comes and beats down your door.

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    Preparation

    Mind you, I am no “tax guru”. Ask my wife. I also don’t have very complicated taxes to prepare, although that has changed a bit since I have taken on some consulting and writing work in the last year. That being said, here are some simple preparations to do your taxes yourself:

    1. Collect – Yep, sort of like GTD. Make sure that you have all of your W2 forms as well as any type of forms sent to you from school, or supplemental income forms (invoices, receipts, etc.). Just gather everything up in a folder and make sure you have it all in once place. You could even scan it in and keep it digitally. If you have any information from your spouse that is needed, grab that too.
    2. Double check – Sit down with all of your paperwork and make sure that it is all there. Make a note of anything missing or anything that is incorrect about the paperwork and start calling around to get your questions answered. If you have paperwork that doesn’t match up to paperwork sent from your employer, take care of it immediately.
    3. If your taxes are relatively simple (a handful of W2s and maybe some supplemental income) then block out at least 3 hours to complete them as well as 1 more hour a day or two later to review them before submitting them. It’s good to give yourself a little time after filling them out to make sure everything is correct and accurate.

    Execution

    There are some great apps nowadays that can help you take care of your taxes. The most popular being TurboTax, yet there have been new apps that have sprung-up the last few years that work just as well.

    One such piece of software was presented to me from a friend called FreeTaxUSA. It’s all done online, which can always be a little scary, but I and many others haven’t had any issue. The nice thing about FreeTaxUSA is that Federal Income Tax e-filing is free and State filing is only $9.99. FreeTaxUSA also keeps your information for the next year so you don’t have to do as much work, allows you to print out and save your filed taxes, and gives you all the information that you would need if you were audited (even audit assistance for a small fee). Not too shabby.

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    Working through FreeTaxUSA is pretty easy, especially for people that don’t have complicated taxes. However, I did have a little trouble this year taking care of my “business income” from all of my side work. I don’t think that it was the software’s fault; more of an “I’m sort of new to this and I don’t really know what I’m doing” type of problem.

    If you are struggling using the self-service tax apps, then maybe someone that you know who is knowledgeable can help you out. Or, there is always just biting the bullet and taking them to a professional.

    Re-preparation

    If you had a rough time preparing your taxes this year, start keeping track of and organizing your information today for next year’s dreaded tax season. We have talked about going paperless this year, so a good thing to do would be invest in a decent scanner and start digitizing all of your important documents. This will keep your stress level down to a minimum during tax season 2013.

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    Another good thing to do if you make some money on the side, would be to use a tool like FreshBooks to keep track of all of your invoicing. It’s a great to make the difficult act of invoicing not that difficult. It also gives you full functionality for three clients for free. FreshBooks is quite the helpful tool at tax time for anyone that has their own business or side work.

    Just remember to try and keep track of everything that will be used for next year’s taxes. Add a reminder to your weekly review to “tie up tax’s loose ends”. This will keep you sane next year.

    Conclusion

    Yes, tax season does suck. And not just because you have to give the Government all of your money, but because it can be stressful and fear-inducing, especially when you don’t know what you are doing. But remember; it’s only scary and overwhelming if you let it be. Instead, prepare for your taxes, execute, and re-prepare every year to reduce the “tax season overwhelm”.

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    (Photo credit: Dollar concept with silver dollar via Shutterstock)

    More by this author

    CM Smith

    A technologist and writer who shares advice on personal productivity, creativity and how to use technology to get things done.

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    Last Updated on July 20, 2021

    Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

    Financial Freedom is Not a Fantasy: 9 Secrets to Get You There
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    Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

    Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

    Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

    In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

    Break Free of Your Finances

    Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

    When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

    Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

    Though it seems hard to believe, it is really very simple to get financial freedom.

    To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

    While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

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    Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

    1. Stop Unnecessary Spending

    We often spend money inwardly, instead of objectively.

    For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

    To stop this habitual spending, log down all your spending over the course of a month.

    Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

    This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

    2. Plan a Monthly Budget

    This is a great opportunity to get serious.

    Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

    Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

    3. Cut-up Credit Cards

    Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

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    If not, you may want to consider ridding your life of the burden that credit cards bring.

    Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

    Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

    4. Increase Savings

    There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

    It’s good practice to save up to 15% of your income.

    Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

    Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

    5. Invest Wisely

    Consider investing in funds.

    Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

    To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

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    Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

    6. Invest in Gold

    There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

    You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

    Another way to invest in gold is through ETFs (Exchange Traded Funds).

    These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

    With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

    7. Stash Emergency Funds

    Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

    If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

    Make it hard to get your cash.

    Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

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    8. Find Fabulous Mentors

    Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

    If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

    There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

    9. Be Extra Patient

    Patience is the key of financial success.

    Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

    So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

    Financial Freedom for All

    Anyone can achieve financial freedom, regardless of their financial circumstance.

    Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

    Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

    Featured photo credit: rawpixel via unsplash.com

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    Reference

    [1] Hartford Gold Group: IRA Retirement Accounts

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