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Tax Tips: 3 Proven Strategies to Reduce Stress When Filing Taxes

Guest post by: Cindy Parran Brochu

Article Overview: Whether you like it or not, tax time rolls around each year. Whether you'll be getting a tax refund this year or you'll be paying Uncle Sam, here are a few tax tips to help you in making tax time a little easier and less stressful:

Tax Tips: 3 Proven Strategies to Reduce Stress When Filing Taxes

Whether you like it or not, the time has come -- time to gather all those receipts and paperwork to complete your tax return. Has it been on your mind lately?

Whether you'll be getting a tax refund this year or you'll be paying Uncle Sam, here are a few tips to help you in making tax time a little easier and less stressful:

1. Be timely: Instead of waiting just days before April 15 to complete your tax return and then rush to get it mailed, decide now when you will either complete your tax return or have your tax information in the hands of your accountant. Setting time aside on your calendar dedicated specifically to gathering the paperwork you'll need to get your tax return completed will help you reach your deadline; and giving yourself plenty of time for this task will help alleviate any last minute stresses and additional money it could cost you.

2. Hire an accountant: If you haven't done so already, it might be a little late to hire an accountant this year, but as soon as you file your tax return in April, get a referral on a competent accountant so you'll be ready next year. Over the past 10 years there have been 4,428 changes to the tax code. This averages out to be more than one every day. Maybe that's why nine out of 10

Americans have someone do their taxes for them. A tax expert can save you from costly errors and provide a wealth of knowledge.

3. Keep your tax papers in a designated folder: Placing your papers in a file called "Tax Return" throughout the year will make tax time easier. Put all your receipts for your charitable giving, donations, property taxes paid, 1099 statements and all other relevant tax papers in this special folder throughout the year so your documents are easy to find when you start preparing your tax

return. Use a colored file folder — this distinguishes it from your other files and is easy to identify when you need it.

Will you get a refund this year or be paying Uncle Sam? Either way, it's important to have a plan. How do you know where best to spend your refund? Here are a few questions to ask before doing so:

1. Do I have an emergency savings account started and at least $2,000 saved in that account?

2. Do I have any credit card debt?

3. Am I behind on my bills?

If you don't have an emergency savings account of at least $2,000 (the ultimate goal being 6 months of expenses in savings), then applying your tax refund to build this account would be a smart choice. Make this a priority.

If you have credit card debt, focus on paying it down. A tax refund can certainly help you in tackling this kind of debt. If you're behind on some of your bills, use your tax refund to catch up.

If you owe a tax payment for 2010, it means that you didn't pay Uncle Sam enough, so here are a few changes you can make that will help you next year:

--Decrease your tax withholding allowances by completing a W-4. This increases the amount of income tax deducted from your weekly pay to meet your tax obligations. Ask the payroll department where you work for this form.

--If you’re self-employed and you pay estimated tax payments, opening a bank account solely for the purpose of saving for your quarterly tax payments will make life easier for you. Setting money aside in a savings account only to be used for your estimated income tax payments eliminates the temptation to use it for something else.

--If you owe personal estimated income tax payments, be sure to plan for these by including them as a part of your monthly spending. You may also choose to move money from your regular checking account to a designated savings account until the payment is due.

Tax time doesn't have to be a hassle. Implement these easy-to-use tax tips to make your tax filing a peaceful experience.

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Article Tags: Cindy Parran Brochu, emergency savings account, tax accountant, tax man, tax paperwork, tax receipts, tax refund, taxes, Uncle Sam
Referred by: http://www.onlinebizu.com



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