Filing your taxes is always a stressful moment of the year. But there are some things that can make you save money while you do so. Read on to know what to do (and avoid doing) during the process.
1. Avoid expensive penalties
Make sure to avoid any penalties by filing your taxes on time and by handing in the necessary paperwork. You can also dodge penalties by following the rules regarding retirement and savings withdrawals. You should always check any doubt you may have because a mistake could cost you a lot of money.
2. Claim a dependency exemption
If you have a child, whether born to you or adopted, then you are able to claim them as a dependent on your returns. An additional dependent can save you thousands of dollars. Make sure to also adjust your W-4 allowances with your employer.
Take into account that associated adoption expenses can also count as a tax credit.
3. Hire a certified public accountant (CPA)
If you’ve had a particularly complicated tax year or if you simply don’t feel comfortable filing your taxes, then look into hiring a professional. The fees charged by CPAs will vary, so make sure to shop around a bit and look for a CPA who has positive reviews online and can provide references as well.
4. Check for free tax assistance
Depending on your financial status, you may be eligible to receive free tax assistance from the IRS. This assistance may also apply to you if you’ve experienced issues when dealing with the IRS in the past, such as excessive delays in communication.
5. Do your own taxes
If you feel you can do your taxes yourself, you can now buy one of a variety of computer programs which will provide step-by-step guidance as you complete your taxes. This is cheaper than hiring a CPA. You will save money but you will need to invest the time in gathering and properly presenting your paperwork.
Forgetting to include the right things in your filing or making mistakes can cost you more than you already have to pay. So file your taxes carefully and with professional help if you feel you need it.