Best Income Tax Tips 2016 – How to Save Money
Another year has come and gone and that’s good in some ways and not so good in others. One of the ways that’s not so good is that income tax season will soon be upon us, and unless you’re one of those people who can use the EZ form, you’re going to have to deal with the hassles of filing your tax return and possibly paying taxes. Of course, you don’t want to do that, so the best way to save is to take advantage of the best income tax tips 2016 has to offer.
Obviously, not all tips are going to apply to everyone, but most people should be able to take advantage of at least some of these suggestions. The lucky among you will be able to take advantage of most of them and you’ll likely find that the best income tax tips 2016 has to offer can save you hundreds or even thousands of dollars when you file your returns this April. The key, of course, is to get started early; the last thing you want to do is find yourself scrambling at the last minute to put your returns together. That’s why we’re offering these suggestions now, so you can make note of them and get an early start. Read on for more about the best income tax tips 2016 has for you.
A List of the Best Income Tax Tips 2016 Has for You
If you’re going to save money on your income tax return, it helps to take advantage of every opportunity. That doesn’t mean cheating, of course, but it does mean that you should take the time to investigate every legitimate option that’s available to you in order to ensure that you don’t pay any more money than you’re legally obligated to pay. Below is a list of the best income tax tips 2016 has for you, so give the list a look and see if there’s anything there that can help save you money.
Get organized – You might think that getting organized isn’t going to save you money, but this might be one of the best income tax tips 2016 has for you. Making sure that you have all of the documentation you need when it’s time to prepare and file your return will help you save money, because you’ll have to pay more if you can’t back up your costs and itemized deductions.
Contribute to your IRA – You probably know that contributions to Individual Retirement Accounts and Roth IRAs are tax deductible. That means that money you contributed to your IRA last year can be deducted from your income when you file in April. What you may not know is that you can still contribute to your IRA for last year. In fact, you have until April 18, 2016 to contribute to your IRA for 2015. If you meant to do it but forgot or simply didn’t get around to doing it, you’ve still got time, but don’t wait. Once April 18 comes and goes, you’re out of luck and any contributions you make after that date will have to be deducted next year.
Itemized tax deductions – Whether you can save more by itemizing, rather than taking the standard deduction, is going to vary from one household to another. What you don’t want to do, however, is not know which way could save you the most money. That means that you need to find out what your eligible tax deductions are for 2015 so you can compare the amount you’d save to the standard deduction. Don’t forget the little stuff, too. Job-hunting fees, tax preparation fees and even certain medical expenses can apply if they exceed 10% of your adjusted gross income. Taking the time to calculate your itemized deductions is one of the most cost-effective steps you can take and one of the best income tax tips 2016 has to offer.
Update your tax software – If you’re using software such as TurboTax, Drake, or H&R Block, be sure that you’ve got the latest and most up to date version. The software does occasionally undergo revisions, so be sure to get the latest updates if you’re using a desktop version of the software. You’ll probably be OK if you’re using the online versions, as they tend to be kept updated for you.
Working from home? – If so, don’t forget the home office tax deduction. A lot of filers tend to shy away from taking this deduction, as they think it might be a “red flag” for an IRS audit. In fact, it’s a perfectly legitimate deduction, and you can deduct legitimate costs of working from home, based on the percentage of the home’s square footage that you’re using for your office.
File on time – It can cost you dearly to file late; keep in mind that even if you file an extension, the taxes you owe are still due in April. Failure to pay on time can cost you dearly in penalties in interest. That should provide sufficient incentive to get your tax preparation done early. Money you don’t pay in fees is money saved, and that’s one of the best income tax tips 2016 has for you.
Take all the deductions to which you’re entitled – This one should be obvious, and yet, what deductions are you entitled to take? A lot of people don’t know. That’s not your fault; the tax code is thousands of pages long. That’s why you need to take advantage of an affordable resource that could save you hundreds or even thousands on your taxes by presenting all of the deductions that you may qualify for to you. You won’t have to worry about legalese or complex tax language, either. This resource will tell you exactly what you need to know in straightforward, easy-to-understand English.
Best Income Tax Tips 2016 Summary
If you know about deductions and don’t take them when you’re eligible, that’s your fault. But no one can blame you for not knowing the code inside and out. That’s what experts are for, and it’s experts that can show you how to save a bundle on your taxes and that’s how the best income tax tips 2016 has to offer can save you money.