This post is part of the TaxACT #DIYtaxes blog tour which shares stories and tips about doing your own taxes and how it makes you smarter about the overall health of your finances. Do your own taxes today at TaxACT. You got this.
April 15th is looming on the calendar, and I need to get our taxes done, but I am not worried because I have been doing my own taxes since I had my first job. Yes, even as a work-from-home business owner, I crunch the numbers every year, and since surviving an audit with nothing owed, I think I have a pretty firm grasp on how to do my own taxes.
The really interesting thing… by doing my own taxes, I am more aware of our spending throughout the year. I can track taxable income and deductions because I know what applies to our tax situation.
If you are considering doing your own taxes this year, here are some of my best tips:
Track every dime of your income
When we were audited, the first thing the IRS wanted to see was our bank statements. Our processor sat down and added up every deposit, comparing it to the amount we had claimed as income. Each check we received as a gift, each cash deposit from a leftover withdrawal… every last dime had to be verified and proven. So, make sure that you are keeping accurate records of your income, even if it is just a $25 gift on your birthday. You may not have to pay taxes on gifts, but you do need a record to know which deposits are gifts and which are not.
Quick tip: When making a deposit, use an ATM that will print an image of the check on the receipt so you can easily remember the origin of each deposit.
Understand your deductions
As a sole proprietor, I was confused about the differences in some of the expense categories we were allowed to use on the Schedule C. What was the difference between office and supplies? Travel and entertainment? Even after researching the definitions, I had questions and was able to ask an IRS representative to get clarification. Now, I can complete our taxes by using the correct deductions.
Quick tip: Research the deductions and credits for which you may qualify on the Internal Revenue Service website or contact the free phone support services available when you file using theTaxACT Free Edition.
Keep everything together
Throughout the year, we collect all of our necessary receipts and tax documents in one file box so when it is time to complete our taxes, everything is ready. Then, once we have finished our taxes, we print our completed return and include it in a large manila folder with all of our receipts.
Quick tip: If you prefer to keep your receipts electronically, you can use an app like Expensify or Evernote to scan and keep your receipts.
Double and triple check
My brain, my eyes, and my fingers do not always connect. When I am completing our taxes, I check each number twice, making calculations on an adding machine with tape or creating a spreadsheet in Excel. Then, once I have every total placed into the tax form, I double check each line before submitting.
Quick tip: Don’t overlook important numbers like your social security number and address. You want that big fat refund to come to the right person at the right house or be deposited into the correct bank account.
Be consistent
When filing your taxes, consistently use the same software each year. While the tax laws do not vary by software, you have the benefit or becoming accustomed to the language and layout of the software and are less likely to make mistakes.
Quick tip: Expensive software is not better than a free service like TaxACT Free Edition. It just costs your more.
Over time, I have become more and more confident in doing our taxes. I honestly have no idea how much money I have saved our family by doing the taxes myself. However, the greatest benefit for me is not the savings, but the financial awareness I have developed. As I seek to be 100% honest on my tax refund, I also have to be completely honest with myself about our personal finances.
Beating the tax deadline doesn’t have to be stressful. With TaxACT everything you need to confidently prepare and e-file your taxes is right at your fingertips. You got this. File your simple or complex federal return FREE today with TaxACT Free Edition.
This post was produced in partnership with Kasai Media.
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