Make April 15 Less Taxing
These strategies can help keep more money in your pocket at tax time.
Albert Einstein once said, “The hardest thing in the world to understand is the income tax.”
Wow. If a genius like Einstein thinks figuring out income taxes is hard, where does that leave the rest of us? Should you choose to prepare your own taxes or should you have someone else do it?
According to www.GoBankingRates.com here is how Americans file their taxes:
- I use the IRS forms and calculate them myself – 8.5%
Either your taxes are simple or you are fearless in your abilities to understand IRS-speak
- I use a digital prep tool like Turbo Tax – 34.5%
A great choice for most people who don’t have complicated income or deductions
- I have a friend or family member do my taxes for me – 10.9%
Keep this friend!
- I go to a brick and mortar company like H&R Block – 8.3%
- I have an accountant file my taxes – 28.5%
- I don’t file taxes – 9.2%
Definitely not recommended
Free assistance is available
There is good news if you prefer to have someone else prepare your taxes for you and don’t look forward to paying for it. If your household income in less than $54,000, there are opportunities to have an experienced tax preparer do your tax filing for you at no charge. Just google “volunteer income tax assistance” and your zip code and you will be directed to a location for free local tax help.
If you enjoy doing your own taxes, you have an unusual understanding of enjoyment. What if you could still enjoy doing your own taxes without having to pay for the digital tools that make it easy? If your household income is $66,000 or less you can use My Free Taxes through United Way to file your federal and state taxes for free.
Ask the Experts
If your income is too high to qualify for free tax assistance, it might still make sense to have an expert prepare your taxes, especially if you have unique income sources and qualifying tax deductions. You may not be aware of all the claims you can make to reduce your taxable income. A tax expert knows what to look for and what you can claim and what you can’t. This expertise may result in additional deductions that exceed the cost of the tax prep service. Plus, if a mistake is made by professional tax preparers, it is up to them to fix it.
If you consistently get a sizeable tax refund each year and your income and expenses are pretty consistent, here is another tip that will put money in your pocket: Increase the number of exemptions you claim. When you do this, instead of getting more money once a year, you get more money with each paycheck. What is the benefit of allowing the government to hold your money all year and then refund it later with no interest? It’s your money, you should keep it.
Even if you like getting a big windfall once a year, just transfer the increase you get in your paycheck to a savings account (that will pay interest) and you can still have that big dollar total waiting for you at tax time.
As you prepare for tax filing season, consider opting into eDocuments from Zions Bank, which are safer, faster and easier to manage than paper documents:
- Safer: No more paper statements or notices sitting in your mailbox waiting for you to retrieve them. Online statements and notices are password-protected and encrypted on the Zions Bank Online Banking platform.
- Faster: Get your bank statement or notice as soon as it's available, not when the mail carrier delivers it. Receive an email notification when your statement or notice is ready.
- Easier to manage: Your eDocuments are in PDF format, so you can easily save or print them. eTax Documents will be available for the previous three tax years.
Mark Twain said, “The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.” You can keep more of your skin if you pick the filing method that works the best for you.