Taxes are a yearly burden dreaded by nearly everyone but the tax preparers. Owing taxes can be a big burden, especially if your budget is tight. Keeping your taxes in order so you don't owe taxes is easy to do if you keep abreast of the deductions from your paycheck and file your tax return correctly and on time. With some considerations of your financial situation, you can organize your taxes so you don't end up owing money at filing time.
1. File your taxes on time. Income taxes must be filed by April 15. If you are going to be late filing your taxes, request an extension to avoid penalties.
2. Research your personal situation and the tax rules that apply to you. People who are married or who have children will figure taxes differently than people who are single. Sole proprietors must pay different taxes than people who are employed at a corporation. Businesses must pay taxes on a different schedule than employed individuals.
3. Have taxes deducted from your paycheck in excess of what you owe. Adding as little as $5.00 per paycheck can reduce your chances of owing taxes at the end of the year, and you will get the extra tax back as a tax refund.
4. Keep your receipts and itemize deductions if they are greater than the standard deduction given by the IRS. Businesses, self-employed individuals and sole proprietors can especially benefit from itemizing deductions for business expenses.
5. If your income is high and you are close to a lower tax bracket that will save you money, you can donate to a tax-deductible charity organization. When selecting a tax-deductible charity organization, verify the organization's tax-deductible status with the IRS before you make the gift to the organization. Tax-deductible is different than tax-exempt, so be sure the organization has tax-deductible status.
- If all else fails, consult the Internal Revenue Service for in-person help straightening out your tax paperwork. The IRS offers free tax help for many individuals, including low-income individuals.
- Whether or not you can afford to pay taxes you owe, filing your paperwork helps protect you from additional penalties and fees.
- "Your Income Tax 2009"; J.K. Lasser; 2009
- IRS.gov: Tax Information for Individuals
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