Taxes
I was thinking of this on the way home. Some tips for those who haven't filed their taxes yet.
This is based on my personal experience and the fact that I have filed several different ways throughout the years.
One - I don't recommend using a tax service. I have had friends that have been hired and frankly the training they received was not that impressive. You would do better going to either a free service (they have them - one year I had my taxes done my retirees - it seemed to me the retirees had more training then the service people did. In fact I paid more taxes going with the service then I ever had in the past. (again based on personal experience but that retiree rocked!)
Two - if you are itemizing it may pay to invest in something like turbo tax. I use it religiously to help me know what I can deduct. Of course it takes me a week to do taxes cause I always go hey I can deduct that and run off to find more receipts. I think it pays for itself, but that is me. I need the assistance.
Three - Crunch numbers. What happens if you put money into an IRA? The first year we switched from working for a corporation to working freelance, we didn't pay quarterly because we didn't know if we would make any money. Discovered via Turbotax that if we put $1500 in an IRA that it would reduce taxes by $900 bucks. (Note to contractors: pay tax quarterly!!!) Yes it was very hard to come up with the extra 600 bucks to make up the $1500 but if the choice is put $1500 in an IRA but it is my money or to give $900 away to the government... is it really an option?
And don't forget to go to the IRS homepage. They have volunteers to help you with your taxes, free electronic filing, information on tax credits for students, for disaster victims, eligibility for the earned income credit, etc.
Always check these out and make sure your not allowing the government to keep your money!
This is based on my personal experience and the fact that I have filed several different ways throughout the years.
One - I don't recommend using a tax service. I have had friends that have been hired and frankly the training they received was not that impressive. You would do better going to either a free service (they have them - one year I had my taxes done my retirees - it seemed to me the retirees had more training then the service people did. In fact I paid more taxes going with the service then I ever had in the past. (again based on personal experience but that retiree rocked!)
Two - if you are itemizing it may pay to invest in something like turbo tax. I use it religiously to help me know what I can deduct. Of course it takes me a week to do taxes cause I always go hey I can deduct that and run off to find more receipts. I think it pays for itself, but that is me. I need the assistance.
Three - Crunch numbers. What happens if you put money into an IRA? The first year we switched from working for a corporation to working freelance, we didn't pay quarterly because we didn't know if we would make any money. Discovered via Turbotax that if we put $1500 in an IRA that it would reduce taxes by $900 bucks. (Note to contractors: pay tax quarterly!!!) Yes it was very hard to come up with the extra 600 bucks to make up the $1500 but if the choice is put $1500 in an IRA but it is my money or to give $900 away to the government... is it really an option?
And don't forget to go to the IRS homepage. They have volunteers to help you with your taxes, free electronic filing, information on tax credits for students, for disaster victims, eligibility for the earned income credit, etc.
Always check these out and make sure your not allowing the government to keep your money!