1.14.2013

Do-it-yourself Taxes: Some Tips and Tricks

It's the most wonderful time of the year: tax season! I've done our taxes with TurboTax for the past few years and it has been a lifesaver. Not only am I a huge numbers nerd, but the software is so easy to use and much cheaper than paying an accountant! If you're doing it for the first time, go through each deduction in detail so you don't miss anything. If you're not sure what it means, there are links explaining in more detail what everything means. You can start your taxes as early as you want which can help you forecast your rebate or payout. Then you can confirm it all as the paperwork comes in the mail for everything.

In short, TurboTax is awesome and cost effective. USE IT! [I've had our past tax returns checked by a CPA friend and everything came back clear. If I can do it, so can you!]

Here are a few tips and tricks I've picked up over the last few years:

Great features:
  1. It pre-populates a lot of information based on what you entered the year prior. This is saves you time each year.
  2. You can file both Federal and State electronically. No need to send in any papers AND you don't have to add to any landfills with the store bought version. Eco-friendly tax preparation! And then you have it direct deposited into your account!
  3. You can start the filing process as early as you want (in January that is). TurboTax saves your progress as you go and you can enter dummy #s to estimate your refund and update once all the paperwork comes in.
Tips & Tricks:
  1.  At the beginning of the year start a tax documentation folder. Put EVERYTHING that you may need to do your taxes the next year. You can always take it out later if it doesn't apply.
  2. If you regularly donate to Goodwill (or wherever) start tracking that at the beginning of the year as well. You can use the TurboTax add on It's Deductible to track the donations. Take photos as well in case of an audit.
  3. If you want to cover all of your bases, also start a Healthcare (medical and dental) Expenses folder. If your expenses exceed 7.5% of your adjusted gross income, you can deduct it! [See more here] But you need all of the paperwork to show it. Keep pharmacy receipts, doctor bills, anything health related. Hopefully you don't have to use them, but in one year Brent was hospitalized with meningitis and we had a baby. We couldn't predict the hospital stay, but we ended up deducting medical expenses that year.
  4. If you have access to a Daycare Flex Spending Account USE IT! Childcare is astronomical and that account will help get you the biggest bang for your buck.
  5. If it's your first time or you're not super confident in the process, use their guide to walk you through everything. It will help you understand what does and doesn't apply to you. That way you won't miss anything!
  6. You can deduct your car registration taxes! When you renew those tabs, keep that invoice in your documentation folder.

I hope you find this helpful and if you have any questions, feel free to reach out! Happy Tax Season from me and Juan! 


[This post was NOT sponsored by TurboTax or anyone else. I just happen to love the software and want to share the cost benefit with everyone!]

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