Tax Day 1: Making Your Tax Plan
Posted by LearnVest on April 5, 2010 at 3:23 PM
Taxes. We can hear your chorus of groans from here! We sympathize—doing taxes certainly isn’t fun, but it IS necessary. Even Albert Einstein once said, “The hardest thing in the world to understand is the income tax.” Harder than quantum physics? Really?
Well, we dare say, we disagree with Einstein. With a little preparation, taxes are not that hard. And luckily for you, you’ve got the LearnVest Tax Crash Course to help make things easier. So no whining. Paying taxes is not optional. Let’s get organized and get them done!
|First and foremost, taxes are not something to fear! They are something to tackle and tackle CORRECTLY. Your number one priority should be to make sure you have the time and resources to get your taxes done error-free. |
The IRS website has great resources, and there are plenty of FREE tax software options to use if you have had a relatively simple financial life this year. What do we mean by “simple”? If you receive the bulk of your income from one source and you are not changing your filing status this year (single, married filing jointly, married filing separately, Head of Household, etc.), you qualify as having a "simple" financial life.
The more complex your financial situation, the longer your taxes may take you to complete. If any of the below situations apply to you, a paid version of a tax software, such as TurboTax (about $30), or hiring an Accountant, may save you significant time! While doing your taxes is not quantum physics (sorry, Einstein), it can be time consuming. The IRS estimates that it takes each American an average of 26 hours to file their taxes!
•You’re newly married
•You bought a home or moved to a new state
•You just had a baby
•You received an inheritance
•You sold securities (stocks, bonds, mutual funds)
•You incurred job related expenses for which you were not reimbursed
•You incurred educational expenses (tuition, school loan interest)
Consider a paid version of a tax software or an Accountant.
If you decide to hire a tax professional. This still takes a little time as you will want to find someone you TRUST—so do your research and find someone qualified. Most people report paying around $200 or more to have someone do their dirty (tax) work. We’ll walk you through the process in the LearnVest checklist “I Need to Find an Accountant.”
So, luckily there is time before tax day—but don’t put off taxes too long! A good LearnVester does NOT pull an all-nighter on April 14th before the April 15th filing!
|Get out your calendar! Mark March 15th as the latest day for you to get cracking. Mark April 15th on your calendar as TAX DAY.|
Action Time: 4 minutes
Set aside time on your calendar to prepare your taxes. Even if you use an accountant, you’ll need some time to prepare all of your financial info for him or her (which we will discuss tomorrow).
Action Time: 1 minute
Start evaluating what the best way for you to do your taxes this year is: on your own, with the help of a tax software, or to hire a tax professional.
Action Time: 3 minutes
|If you decide to do your taxes completely on your own, block out lots of time. You don’t want to get taxes wrong! E-filing with the IRS will save you time (Choosing and sorting through tons of forms is so 2009!), but you want to make sure you have all the time you need to get your taxes right!|
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