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Bothersome as taxes are, if you prepare for them throughout the year, you might find the experience far easier the next time you have to file. Use these tips to help:
Get Started Now
Procrastination can be your downfall—it often happens that the longer you put something off, the more daunting a task it seems. And the last thing anyone needs is an excuse to be more overwhelmed by the thought of working on taxes. If you know that you struggle with preparing your return, make the call to a professional who can help you.
Set Up a Filing System
The flurry of paperwork is stressful enough when you're doing your taxes—not being able to find a necessary slip of paper only makes it worse. Create files for receipts and other documents and be sure to keep them updated. If you want to go digital, use a scanner to file everything neatly in specialized folders on your computer.
Inquire about Employer Tax Benefits
Does your employer offer tax-saving benefits? If they're available to you, consider how much smarter it is to use pretax dollars for things like medical expenses and child care. If you need more guidance about how to best take advantage of the offered programs, check with your human resources department or your own tax preparer or financial planner.
Do Tax Checkups
Don't let yourself be shocked when tax time rolls around—the psychological and financial stress of being unprepared for a big tax bill can take a major toll. Do yourself a favor by checking on your tax liability a couple of times throughout the year. If you need to make adjustments to your withholding, do so as quickly as you can. Even if you find that nothing needs to be changed, you'll have something to smile about and one less worry to occupy your mind.
Make It a Habit to Save
Putting extra money away is always a good habit, whether the intent for it is to help pay off tax bills or to purchase a new vehicle. Giving yourself a little extra cushion to fall back on doesn't have to make you feel fiscally stressed, though. Put away $20 here and there, or have a percentage of your paycheck sent directly to a savings account. You'll be excited to see your savings grow.
For more financially sound ideas, visit blog.equifax.com.
