This post is brought to you by TurboTax. While this post was sponsored by TurboTax, all content and opinions expressed here are my own.
Tax season is upon us, which can be a stressful time of year for anyone. Millennials in particular tend to dread filing their taxes—according to a 2016 survey by NerdWallet, 80% of millennials worry about preparing their taxes because they are afraid of making a mistake, paying too much in taxes, or not getting a full refund.
Taxpayers can reduce the stress of filing their tax return with these 7 tips below. Following these methods will help you feel much more confident about filing your taxes, this year and every year:
1. Review Last Year’s Return
Even though you file taxes every year, it’s tough to remember from year to year what documents the IRS is going to ask you for. That’s why it’s a good idea to start by digging up last year’s return to take a look at what documents you previously provided.
Though you ought to keep a hard copy of each of your tax returns for at least 3 years (7 if you file a claim for a loss from bad debt reduction or worthless securities), don’t panic if you haven’t kept (or can’t find) paper copies of previous years’ tax returns. Filers who use tax filing software like TurboTax can access prior years’ returns through the program. Otherwise, you can receive a previous year’s return directly from the IRS by filing Form 4506 and paying a $57 fee.
2. Filing Your Taxes Online Can Alleviate Your Worries About Changes in the Tax Law
You might be hesitant to do your own taxes because you think you need to be an expert in tax laws just to file your return. But when you file online with TurboTax, the program will ask you simple questions that will help you claim the tax deductions and credits you are eligible for. You don’t need to know anything about tax law changes, because TurboTax has you covered.
You can also jump-start your taxes by snapping a picture of your W-2 and answering a few questions. TurboTax will put the information on the correct forms, meaning you don’t have to waste time with data entry.
3. Don’t Forget Your Major Life Changes Can Give You Big Deductions
It’s unlikely that you’ve forgotten getting married or having a baby or buying a house in the past year, but you might not remember that each of those major life events will make for changes in how you file your taxes. Here are some of the potential life changes that can give you big tax deductions:
- Having a child
- Buying a house
- Moving to a new state
- Going to college
- Losing your job
- Starting a business
If you have experienced one or more of these major changes in the past year, make sure your tax return reflects your new life.
4. Don’t Forget About Your Side Hustles from the Past Year
Millennials may not have invented the side job, but they have perfected and branded it. Filling in your money gaps through a side hustle is a savvy way to protect yourself financially, but you have to remember you are now self-employed and you need to report all of your income from the various non-traditional money-makers you’ve taken on over the past year.
If you don’t happen to be the sort of inhumanly organized person who saves all their receipts and check stubs for all of your side hustle work, all is not lost. The new TurboTax Self-Employed software provides entrepreneurs, freelancers, and side hustlers with year-round service through QuickBooks Self-Employed to help you keep track of the various income and expenses related to your self-employment so you can get the refund that you deserve. Right now, TurboTax is offering PTMoney readers 10% off TurboTax Self-Employed.
If you wait to do your taxes you may find yourself staring down tax day with your returns still unfiled. Waiting until the last minute means you are much more likely to feel rushed while you file your taxes, which is when you are most likely to make a mistake. If you plan on doing your taxes earlier, then you have the time to double check your work and make sure you’ve dotted every I and crossed every T. Plus about 75% of taxpayers receive a tax refund close to $2,800 so there’s no reason to wait.
Not waiting until the last minute offers another important benefit — you can ask for help you if you find yourself overwhelmed or confused. Even if you’re doing your own taxes, with TurboTax you can access a credentialed CPA or enrolled agent to get answers to your tax questions on demand via one-way video while you work on your return (for free!).
6. Don’t Avoid Filing Because You Can’t Pay Your Taxes
If you know you can’t afford to pay what you owe in taxes, you might be tempted to just not file and wait to send your return until you have the funds to pay your tax bill in full, but you will face a penalty for late filing. That just makes your tax bill bigger.
If you find yourself in this situation, file your taxes on time and pay as much as you can of what you owe. In addition, you can request an installment agreement online or by filling out form 9465.
7. Don’t Think DIY Taxes Means Going at It Alone
We tend to have an image of do-it-yourself taxes as being a completely solo endeavor. It’s just you, some sharpened pencils, and a shoebox full of receipts.
But it doesn’t have to be that way. Filing services like TurboTax are inexpensive and easy to use, even for individuals like the self-employed. With TurboTax experts and credentialed CPAs or enrolled agents available on demand via one-way video to answer your questions and software that will help you find all the deductions you are entitled to, using TurboTax can help you rest assured that your taxes are filed correctly. You can file on your own, without feeling alone.
Taxes Don’t Have to Be Scary
Tax season doesn’t have to be a source of stress or worry. Having the right software like TurboTax and taking your time will help you to change tax filing from something you dread, to something that helps you feel empowered.