It’s Not Too Late! 4 End of the Year Tax Hacks for Your Wallet
Taxes. We all pay them (unless you’re Jeff Bezos). So how do you figure out how to pay less of them? Use these end of year tax hacks.
Tax season is at the door and it’s knocking. Unless you’re exempt from paying them, it’s time to get your finances in order.
End of the year tips and tricks help experienced and novice filers migrate the tax process with ease.
Knowing how to file your taxes right and on time helps you avoid major penalties and fees. You get a jump start on back taxes owed to the IRS. And, you protect your credit and assets.
The IRS can place a lien on your credit report and public record when your taxes aren’t handled right.
Are you trying to figure out how to pay fewer taxes each year? Learn how by using these end of year tax hacks.
Most people sit and wait on their W-2s before they file their taxes. That’s fine, but you can get ahead of the process before it comes.
Gather and order all your necessary documents.
You can pull information from 1099-Misc forms and your paystubs. Don’t worry if you didn’t file your stubs for later use. Depending on the business size, you or your employer can print one from paystubcreator.net.
Pull your mortgage documents to claim pre-paid interest. Also, start working on your itemizations and deductions.
Pre-planning helps you discover what you can save on before starting your taxes.
Get Your Filing Status Right at the End of the Year
Using the wrong filing status is one of the most common mistakes consumers succumb to every year.
The wrong filing status on a tax return results in fewer or more tax benefits received. Both can get you in hot water with the IRS.
Choose the right filing status:
- Head of Household
- Married Filing Joint (or without a spouse)
Each status determines your tax bracket, which could save you money if filed the right way upfront.
Claim Qualifying Dependents
Your children count as a credit. The Child Tax Credit reduces your tax bill. It grants up to $2000 per child, including those you didn’t birth.
If you provide financial support for a child dependent over the 12-month period, you can claim them. For each one, the IRS entitles you to a $500 credit.
The qualifying child must be a U.S citizen with a government-issued social security number.
Working classes families—middles and low-class—have eligibility for earned income tax credit.
This credit works on your behalf based on the amount you’ve earned, income, and family size. Not only do you save money, but you also get it back. EITC reduces your tax responsibility and enlarges your refund.
As long as you worked, earned income credit works as a freebie for you.
Every U.S. citizen has a responsibility to pay taxes unless certain allowances apply. Don’t go about it without the right tools.
Consider these savings and use these end of the year tips to maximize your taxes.
Keep your finances in order. Read our finance guide for more tips on getting through the next calendar year.