Learning About Household Budgets

Why You Should Think About Tax Season When It's Only October

It is October, and you are thinking about Halloween, Thanksgiving, and Christmas. Well, maybe not Christmas — yet. Nobody really wants to think about Christmas just yet. You definitely are not thinking about tax season right now either. Only major corporations are thinking about tax season because they want to lower their tax debt by giving employees seasonal bonuses. However, regardless of the fact that it is only October, you absolutely should be thinking about tax season. Here is why.

There Are Things You Can Do Now to Lower Your Tax Burden

There are things you can do now, before the end of this year, to lower your tax burden. Since you only have two months to do these things and still claim credit for them, you need to get on the ball.

For example:

  • Donate all of your gently used clothing and furniture to a thrift store for the tax write-offs
  • Send hundreds or thousands to your favorite charities
  • Donate your time to a good cause (which is then multiplied by a base pay rate for tax purposes)

Since any and all of the above MUST be completed prior to the end of the tax year in order to take the tax breaks for them during tax season, you have to get going on these charitable acts now.

If You Suspect That You Will Owe Money, You Need to Stash Some

Despite the fact that the holidays are right around the corner and you want to spend money like it is going out of style, you might want to rein in your spending just a bit. Most people discover that they owe something at tax time, but because they have just gotten themselves into debt for Christmas or Hannukah, they have nothing left to pay the IRS. If you suspect that you will owe the tax man a little "sum'm, sum'm" this year, you may want to stash some money away rather than drop yourself into the red for presents.

You Can File Far Ahead of Everyone Else and Beat the Rush

Most people, especially those that know they might owe the government some money, will avoid filing until the last minute. That is a problem, because it jams up the IRS's system with millions of tax forms, slowing down the whole process for everyone, including those that are expecting a refund. If you have an accountant manage your tax preparation, this also causes the workload to back up for him/her. By thinking about your taxes now, you can plan ahead and file your taxes ahead of everyone else. Then you will know what you owe, ask for a payment plan on what you owe, or know what you will receive for a refund, and that you will get the refund quickly when you file really early.

Tax Season Starts With the New Year

It is a humbling and bewildering thought when you realize that this year is nearly over. Just two and one-half months to go, and the new year is here. The new tax season technically begins on January 21st, but most people are ready to file with their first paycheck of the month, making the very first day or week of the new year tax season. That said, you really should think of the fall and winter holidays in conjunction with tax season, since they are so very close together and come at you in rapid-fire succession. 

Talk to Your Tax Prep Person or Accountant

If you decide to be proactive about your taxes this year, you can have your usual accountant or tax prep agent look at your finances now. This will help you determine if you are at risk of paying in. It will also help you figure out how much you can donate to avoid paying the IRS.

Check out websites like http://www.cpa-winterhaven.com to learn more.