For many of us, filing taxes is ranked right under root canal on the list of ‘things we’d rather not do.’ According to research by the Pew Institute, in fact, at least a third of Americans say they don’t like doing their taxes.
Of course, filing taxes is an unavoidable part of adult life. But that doesn’t mean it has to downright daunting. With a few small tweaks, you can help the process run more smoothly—and perhaps even end up with a better tax return.
Just in time for tax season, here are few tips to help:
1. DON’T REINVENT THE WHEEL
Before you start, make sure you have all the paperwork you need. There are plenty of handy check lists out there that will give you a clear rundown.
Save time by starting with your tax filing from last year. Most of us have little if any changes from year to year. As a best practice, get in the habit of scanning your tax paperwork every year so it’s ready for easy access. The ScanSnap iX1500 receipt feature makes this a breeze. It even exports your data into all sorts of formats, allowing you easily upload it onto software for accounting or digital filing.
Many of the tax terms can be confusing. Take advantage of some of the free tax glossaries and tax guides outlining the most popular deductions. There’s also free in-person help for people who have $56,000 or less annually.
Lastly, avoid burnout by giving yourself enough time to work in chunks. If possible, break your work into one-hour chunks. While you work, play relaxing music and work in an uncluttered space. Choose to work on a day when you’re well rested and can get through the process uninterrupted. These small but important details will set you up for success.
2. TAKE CREDIT WHERE IT’S DUE
Most of us who have filed taxes are familiar with tax deductions, which reduce your overall taxable income.
But surprisingly, a lot of people don’t take full advantage of tax credits, which reduce your tax bill, dollar for dollar. For example, an estimated 20 percent of eligible Americans don’t claim the Earned Income Tax Credit.
And truly, tax credits can apply to all sorts of things, including: coming out of pocket for dental services, gluten-free products (if you have celiac disease), and even purchasing crutches if your health insurance didn’t cover it.
While charitable donations are a popular credit, remember you have up to five years to claim those. In some cases, it might make sense to wait—especially if you don’t owe any taxes.
Again, just remember to scan and save any proof of those contributions.
3. TIME WISELY
Keeping an eye on the calendar can help you maximize your refund.
Case in point: If you can make your January mortgage payment before December 31, you could get the added interest for your mortgage interest deduction. Or, schedule your health-related treatments and exams in the last quarter of the year to boost your medical expense deduction potential.
If you’re self-employed, research which purchases will qualify for deductions. Buy things like office equipment and software before the end of the year will likely increase your refund.
Also, remember that you have until the tax filing deadline (April 15, 2020) to open or contribute to a traditional IRA for the previous tax year. That means you can still make contributions that count for your 2019 return.
As you work your way through your filing, you’ll undoubtedly notice a small mountain of paperwork mounting. Experts advise you keep all that paperwork for at least six year, in case the IRS audits you. Now that’s a lot of paperwork!
An easy solution is to scan it and save it to the cloud—so that it’s safely stored without gobbling up too much space. The ScapSnap iX500 allows you to do this quickly, and with all sorts of content—everything from receipts, to business cards to lengthy forms.
Lastly, commit to setting yourself up for easy success next year. Keeping all your tax paperwork digitally archived will make things a breeze. And come next tax season, you’ll thank yourself!