Taxes are a day-to-day reality for just about every person in America. The IRS taxes everything that you earn, unless you have deductions or other legal tax exemptions. Planning for April 15 by building a budget, tracking your expenses and always paying your taxes can save you time, inconvenience and money. Getting some help can also keep you on track with your personal financial plan.
Budgeting is a basic financial planning method. When you set up a budget, you write down how you will spend your money before you actually get it. That way, when you get your paychecks, you already know what you’ll do with them. This can help you make sure that you’re spending your money in a way that meets your goals, rather than just spending it unwisely. Your budget can also set aside money to pay taxes or to pay down your debts.
Tracking Deductible Expenses
The IRS lets you write off money that you spend for purposes that it approves. Deductible expenses can include money that you spend on mortgage interest, money that you give to charity, moving expenses that you pay if you have to relocate for a new job, or money that you spend on managing your investments. To be able to claim your deductions, you’ll need to be able to prove that you spent the money, so keeping records of what you spend can be helpful.
Paying Your Taxes
Your tax return is due on April 15, or on the first weekday after April 15 if it falls on a weekend. Not filing your return and not paying your taxes could land you in trouble with the IRS. If you don’t pay the IRS, it can record a federal tax lien against your property. It will show up when you check your credit report, and it could lead to you having your funds in your bank account taken or your paychecks sent to the IRS.
Financial and tax planning can get very complicated. If you have a small business, it could affect your taxes and your ability to take write-offs. The way that you choose to save for retirement or for other future goals can impact your taxes now and how much money you have in the future. Sometimes, getting expert help from outside can give you the information you need to make better decisions, cutting your taxes and leaving you with more of your own money working for you.
About the Author
Solomon Poretsky has been a writer since 1996, with experience in the fields of financial services, real estate and technology. Poretsky holds a Bachelor of Arts in political science from Columbia University.
This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.
Published by permission from ConsumerInfo.com, Inc., an Experian company. © 2014 ConsumerInfo.com, Inc. All rights reserved.