How to Save Money at Tax Time

Tax filing time comes every year like clockwork and yet people still find themselves rushing around to get their paperwork together and often end up spending money to get their tax work completed. Being unprepared to file your taxes in time is one way you end up losing money because of rush filings, lost deductions, and a push to get refunds back faster.

Here are some tips to save money and develop better record-keeping habits when it comes to your income taxes:

Don’t procrastinate doing your taxes. Weather you do them yourself or use a service, procrastination can cost you money. Rushing to get everything together can cause you to forget important receipts, expenses and potential tax write offs.  Waiting until the last day to file leaves you with out the option to go back and find receipts or information that may help your refund.  Tax time comes every year, prepare for your appointment ahead of time.

Save those receipts.  Save receipts that can be considered potential write offs. If you are not sure save it anyway.  You can throw receipts away if they are not needed but you can’t recreate them. Save even the smallest expense receipts.  These small expenses add up and can change the amount of your return significantly. 

 Keep track of your donations even if you didn’t get a receipt.  Items such as church donations, those few dollars you gave to the local animal shelter or the donated bag of clothes to the goodwill all add up.  Sometimes you are not able or patient enough to get a receipt. Tracking these things on a simple piece of lined paper or in a database can still be sufficient enough to be a write off. You have to have some concrete information such as the organization name, general time frame of the donation and the estimated amount of its worth for this to be a valid expense.  Keeping track even without a receipt can help maximize your refund. 

Organize your receipts. It’s never too late to create a system to organize your receipts. Many things are potential write offs such as rental property, student loans, dependents, and home business costs; to name a few.  You need receipts to prove money was spent and to recoup it at tax time.  Each area of expense should have a tracking system for your receipts that are associated with each area. You can use folders, envelopes or even file cabinets to organize receipts for each expense.  Organizing is the single best way to make the best of tax deductions. 

Ask questions of your tax preparer.  Before you schedule the appointment with your tax preparation service make a list of items that you are questioning as write offs.  Mobile homes, car repairs, even sidewalk repairs may be considered legal and appropriate write offs.  There are many less than obvious expenses that may be fair game to claim on your tax returns. Ask your tax preparer about these questionable items prior to your appointment.  The nice thing about getting taxes prepared by a service is that they will stand behind you if any of these items come into question.