You may have heard of tax payments, but have you paid your taxes yet? If not, it can undoubtedly be an overwhelming experience for you. In fact, it’s typically overwhelming for a lot of people.
As a tax beginner, you want to educate yourself on what to expect in tax season and what to avoid. Here are some tips for you to keep in mind:
1. Know the Best Software to Use
If you want to be confident that you’re filing your taxes as accurately and professionally as possible, consider the benefits of using the appropriate software. Online tax sites may charge you a fee, but they also simplify the process of paying your taxes.
Designed to take you step by step through the process, tax preparer software allows you to understand what you’re doing as you do it. Of course, you have to be prepared with the right information before you get started but with tax software, you’ll be able to file it easily and effectively.
2. Report All of Your Income
A mistake that some people make when they’re filing taxes as a self-employed individual with multiple hustles is that they don’t report everything that they’re making.
While this may be easy to do if you have a lot going on, if you want to make sure you’re accurately reporting income and paying taxes, you’ll have to stay organized with your money.
Even that $600 paycheck you received for a random hustle should still be reported. You may find that there are people who want to pay under the table, but in these instances, it’s still best to report your income so that you avoid any issues down the road.
Additionally, you’ll want to make sure you’re making estimated tax payments as needed.
3. Understand the Forms That You Need to Use
As you learn about how to pay your taxes, keep in mind that you will have to use the right forms to file. If you’re a freelancer, you’re probably not on a W2, so if your employer isn’t giving you a 1099, make sure you ask them about it.
You can’t properly file your taxes without the appropriate tax form, so before you even start receiving pay for anything, make sure you’ve got everything taken care of with the forms that you’ll need, come tax season.
4. Make Sure You’re Saving the Right Documents
When your employer(s) send you tax documents, make sure you’re saving them in a safe place. The last thing that you need is to get set up for tax filing and discover that you can’t find your paperwork.
Documents received from the IRS should be kept in a safe place as well, as you may need them in the future.
Receipts for company expenses must also be saved if you’re reporting business expenses to save money on tax payments. Whether you save these documents online or in physical form, just ensure you keep your tax paperwork throughout the year.
5. Research Deductions
If you want to spend less on your tax payments, take time to research the kinds of deductions that you can get. There are options available for parents, students, your expenses, and so much more.
But you need to be sure that you’re accurately reporting and choosing the appropriate deductions for your situation.
Working with a CPA accountant can help simplify this for you as they know exactly where you could save money and help you avoid any mistakes while filing your taxes.
Conclusion
While we may wish we didn’t have to pay taxes, it’s an unfortunate part of being a grownup. However, it doesn’t have to be that scary if you know what you’re doing.
To do your best with your taxes, consider the above-mentioned points so that you avoid mistakes and stay organized with your paperwork.
