Josh Elledge - CEO, UpMyInfluence
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Important Lessons in Personal Finance Everyone Should Know
When tax time comes around, you want to make sure you're prepared. If you've ever had tax problems in the past or think there's a chance you could make a mistake on your tax return, you'll want to keep this list of helpful tips in mind. It will help you avoid any unnecessary stress when it comes to dealing with the IRS at tax time.
Do Prepare Your Documents Ahead of Time
The best way to get rolling into tax season is by preparing yourself ahead of time. While many taxpayers stress themselves out by waiting until the due date is looming, you can gain confidence and understanding of your situation by gathering your tax documents ahead of time.
Every taxpayer has their own circumstances to consider, but most people can start by organizing the forms they receive from their employers, clients, or banking and investment firms. The most common forms include W-2, 1099, and mortgage and investment statements, as well as receipts for self-employed workers. These forms should be collected as soon as they are received so you'll be ready to file early.
Don't Let Stress Delay Action
If you've ever put off doing your taxes because you're worried about making mistakes or potential penalties from the IRS, you're not alone, but the IRS can be more understanding than you might believe.
Rather than resorting to panic or sticking your head in the ground, your best solution is to tackle tax season head-on and resolve any situation that comes up with a level head. Not only does the IRS typically find and fix simple mistakes on their own, but they also have solutions for those who might simply need to explain their situation or amend their returns.
Do Use Technology to Reduce Chances of Mistakes
Thanks to advances in technology, many tax situations are more easily explained with the help of various forms of e-filing. Studies have shown that errors are reduced from 21% to .5% when taxpayers file their taxes electronically rather than via mail.
Even with the advanced capabilities of technology, however, it would be wise to double-check your work as you go to ensure you're giving accurate information.
Don't Be Afraid to Get Professional Help When Necessary
Although the tax code can be quite complicated, many people can do their taxes by themselves because they simply have to punch in a few numbers from the forms they receive from their employers. However, there are others, especially those with complicated deductions, who could use the help of a tax professional to guide them along the right path.
If you can't make heads or tails of your tax forms, or if you've gotten yourself into some trouble you don't think you can handle yourself, don't be afraid to talk to a CPA, tax attorney, or another tax professional to ensure things are handled with care.
By now, it should be clear that taxes don't need to be stressful, especially if you take the proper methods to do them the t way from the start.
