You may be a natural born saver. The type of person who cooks at home to save a few bucks, already has their finances in order, or is good at putting money away for a rainy day. But that doesn’t necessarily mean that you are a tax pro—after all, it can get complicated quickly. So, to help you save money when filing your taxes, we have put together a few essential tips. It also helps to use a tax calculator to see what your refund might be
1. Donate to charity
Make sure that throughout the year you are donating to charity, and getting a receipt for it! Even if you are donating clothes to a secondhand store, it is important to get a receipt to note what you gave and how much it will be worth. With this one, every little bit helps!
2. Get help to make sure it is done right
Though it may seem easier and cheaper to do your taxes yourself, you may want to spend the extra money now and have them done right the first time, instead of waiting too long, doing it incorrectly, and having to owe more at the end. There are tons of companies that are available to help you file properly and on time. This will help you to avoid discrepancies and penalties.
For example, if your spouse files incorrectly, you don’t want to be held accountable. In extenuating circumstances like these, you a tax experts help when it comes to innocent or injured spouse relief. It can be offered to those who have had a spouse that filed improperly, when they failed to report income, or claimed improper deductions. They can help you determine if you qualify and what the next steps should be.
3. Ask for professional help for long-term savings
If you’re trying to increase your savings and build your passive income, getting a financial advisor’s help is a good step in the right direction. They can advise you on which stocks and assets to invest in and guide you through the process of building up a savings for later in life. Don’t be discouraged if you don’t have a lot of income to invest right now, you can start off slow and increase how much you allocate to investments as your salary grows.
4. Research what is best for your W-4
It might be worth a good google search or asking an accountant to review how you are claiming things on your W-4 at work. You want to make sure that you have it filled out in a way that provides the most benefit for you and your finances.
5. Contribute to your 401k
When contributing to your 401k not only are you saving for the future, but you’re saving now because the money that is deducted from your paycheck is invested as pre-tax money. Another perk that comes with having a 401k is that some companies will match your contributions. That is even more “free” money that will help you live more comfortably in the long run.
6. Create a savings account for next year
If you find that you have to pay a lot in taxes every year, it may be wise to start saving at the beginning of the year, that way you will have a hefty lump sum when it comes time to pay next year. Even if you are only able to put away a few bucks every paycheck, you will have more than if you don’t save any at all. If you need to, plan it so there are automatic transfers or deposits taken from your paycheck. That way you don’t even see it throughout the year.
7. Start an IRA
An IRA is similar to a 401k but they can offer more perks, strengthen your portfolio, and allow you to invest in different things. Like a 401k the money you contribute is tax free. Also, with an IRA, your savings has the potential to grow faster than in any sort of taxable account. There are a wealth of companies that offer IRAs of various types out there, so you’ll need to do your research and learn more on the nuview trust, or other companies you might be interested in, so that you can make as informed decision as possible regarding who you will start your IRA with.
There are so many ways out there to save money. If you are finding that you are lost and not sure of the next step to take, reach out to a professional. They will be able to help you find your footing, and you will be on your way to a better financial future!
Leave a Reply