Tax Season is officially upon us, and chances are you may have already filed your tax return. Have I filed my taxes yet? No, even though I have my 1098 (for my mortgage), my 1098-E (for my student loans), and 1095 (for my health insurance). I plan to file them next week. I should not have to pay back, more on that later.
When you stop to think about it, there are so many tax forms and it is no wonder this time of year gives people anxiety. If you have only ever had to fill out an 1040-EZ then chances are good that you only know a W2, maybe the 1098-E, and now the 1095. Furthermore, if you have only fill out a 1040-EZ, the chances are higher that you have never had to pay to file your taxes. In fact, VITA, a Volunteer Income Tax Assistance Program, offers free tax help . This service is available for individuals and couples with a household income of $54,000 or less, persons with disabilities, and limited English-speaking taxpayers. Volunteers are certified, and typically are tax professionals or college students in accounting or finance programs. In Utah, for more information visit Utah Tax Help.
Before I get any further into this post, I want to state that I am not a certified tax professional, although I should consider trying to become in the future to back to the community through VITA. Oh, now that paragraph above makes sense. Although I am not a certified tax professional, I do feel confident in sharing my knowledge and personal advice in this post. For truly complicated tax questions or concerns always contact a CPA or another tax professional.
Why do I, a City Recorder and pet-mom blogger feel confident in sharing this post? Simple, accounting and fiance are a major part of my life. As mentioned in other posts, I have a Bachelor’s of Science in Finance from the University of Utah. I was an active member of Beta Alpha Psi for two and a half year. I worked in the Finance Industry, and prepared my Series 7 license; and although my path led me down a different road, had I taken the test I am confident I would have passed. Instead, I moved into the public sector and have work in governmental accounting for the past four years. Both accounting and personal finance interest me. Lynden once said to me, why can you not find a job where you budget and look at numbers. Six months later I was a deputy clerk auditor for Carbon County. So yes, I feel confident in giving my suggestions, but I still always contact your tax professional or financial advisor for complicated issues.
Although I love my food posts, and enjoy the random ones that usually only benefit me, I am very excited to introduce the newest segment of my blog! So sorry for the very long introduction, but welcome to what is my first “Personal Finance” post! And now to the meat of the post?
Remember how above I mentioned that it is tax season, well a friend posted this yesterday on her Facebook and I could not stop laughing. This fits perfectly into my topic for today. Tax Season, what a dread. It is a good thing that we had about 20 minutes of discussing filing taxes in High School. Yes, I had some explaination during my college years, but what about those who do not attend college? Or, what about those who are not business students, did you have any training? Probably not, which is probably why we all know that the best time to start worrying about last year’s taxes is February.
What if I told you that mindset is horrible! In fact, there are so many mindsets concerning taxes that are just downright wrong. I actually had a professor that required us to fill out a personal finance statement and monthly budget. The template was modeled after his own, and it included your estimated tax return! How many people out there have had to pay taxes before? Raise your hand nice and high because even if you have not yet had to pay, there is a chance that sometime in your life you will need to pay.
Okay, so back to the when do you need to worry about your income tax liability. The correct answer is always during the present year you are earning the income. So, with that logic, although I have yet to say goodbye to my 2016 income tax liability, I need to keep my eye on my 2017 income tax liability. This is actually something I have been doing for years. It saves my the stress of wondering if I will have to pay back Uncle Sam because guess what, I have had to pay him before while I was in college. My goal is to never have to pay back again, even if that means little to no refund.
About four times a year, I like to calculate my tax responsibility. Did you that the IRS website is actually user friendly? Seriously, I use it all the time, okay about four times a year. Of course I am not simply reading through the IRS website for fun, no I visit the IRS Withholding Calculator to determine my tax liability. I try to make sure that I am paying enough taxes for the year. It is simple, and all you will need is your most recent paycheck stub!
So, if there is any take away today from this new post it is this, everyone struggles with tax season, including tax professionals but that is a different story because they are dealing with stress. Tax laws are at times complicated, hence the need for a tax professional. Help is however available whether you are a high earner paying for it, or a low income earning who files taxes through volunteer programs. And, most importantly make checking your tax liability a quarterly, or at the very least a bi-annually habit. Trust me, it will help you manage your taxes and possibly avoid paying too much or too little to Uncle Sam.