If you have had to file an extension to complete your 2016 taxes, you are not alone. More citizens than ever filed extensions last year, and this year is on its way to being another record-breaker. While you don’t risk any legal problems by paying your taxes late (providing they do get paid), you will pay extra interest and fees, in addition to whatever money you might owe. It’s best to avoid these penalties, as taxes are already expensive enough. Here’s how to better prepare yourself for next year.
One of the best ways to have your taxes done right is to use convenient software solutions. It’s easy to make mistakes on paper tax forms, especially if you aren’t even sure which forms to pick up or where to get them! Software solutions like TurboTax take away the guesswork, and are available at discounted rates through Groupon! Groupon offers lots of great discounts around tax season, so be on the lookout when winter ends and spring starts to rear its head. This is a sign that tax season is right around the corner, and you can be prepared by saving money on expensive tax preparation. Do it yourself the modern way!
Another way to prepare for tax season is to gradually keep track of expenses and deductions. If you plan to deduct more than the standard deduction, it is up to you to keep track of receipts, and other methods of verifying the expenses that you are deducting. Important deductions include the interest on your mortgage loan, the business meals you pay for as a freelancer, or the office space that you have devoted to work in your house. It can be troublesome to keep track of countless paper receipts, but these can be easily filed with organizational systems sold through Amazon.
In most cases, you’ll never have to display the receipts and other proofs of purchase. These are merely required to help you keep track of your actual expenses, as well as a way to protect your interests in the event that you are audited. Usually, low to mid earners are not audited unless the numbers they indicate in their taxes are far outside of the ordinary, but it’s always a good idea to be prepared anyway. Keep a daily tally of expenses, as well as details like mileage if you intend to deduct travel costs associated with your personal vehicle. Other requirements will apply to people in different situations, so make sure to research the deductions you are entitled to with reference to your specific line or work.
At the end of the day, tax season just isn’t that daunting if you prepare throughout the year. It’s when you wait till the last minute that things get hairy. People often pay more than they have to, simply because they don’t have the documentation necessary, or that they are not aware of discounted options available through Groupon. Whatever your excuse, don’t let another tax season come around without being totally prepared and confident.