Tax season isn’t a favorite time of year for many, but it comes along each year in mid-April, so let’s explore a few tips to ease the stress of Tax Day and have a sense of humor about it. Warning: finance-focused puns ahead.
Consult a CPA or tax-focused accounting firm. Pessimistic accountants during tax season see it as an accrual world, but really, they have outstanding figures. If you haven’t filed your taxes yet and are not too keen about doing online taxes with TurboTax or other various systems, read some reviews of CPAs or tax firms in your area to find an option that best suits your needs (and budget). Despite their job being taxing, an accountant is there to help you when a lot of numbers and paperwork is involved. They will reconcile differences and will be good at crunching those numbers. In addition, CPAs will keep your assets first and drop any liabilities, which is good for balance. Win, win!
When you finally choose your tax advisor, sit down with them to discuss any extra credits or deductions that might be available. Donating to charities is an obvious deduction but consider putting several years’ worth of gifts into a donor-advised fund for an immediate deduction. Then, you can spread out the giving over the next several years. But, of course, first, check with your CPA on the details.
Move towards clean energy. With Earth Day around the corner, consider implementing some clean energy this year. In 2022, the federal Inflation Reduction Act included nearly $400 billion for clean energy tax credits and other provisions to combat climate change. For individuals, this could be thousands of dollars in potential tax credits for buying new or used electric or hybrid clean energy vehicles, installing residential energy property, or other steps towards clean energy. Restrictions apply, so check with your CPA on which credits are available.
Know the Taxpayer Bill of Rights. As a taxpayer, you have the rights when dealing with the IRS. Keep the Taxpayer Bill of Rights in mind when you begin to file. For example, you are entitled to things like your privacy, confidentiality and never paying more than the correct amount of tax.
Be mindful that you are not alone when it comes to taxes. Tax season is a reminder that “Mo’ money, mo’ problems” is, for some, more than just a Biggie song, and it can be a super stressful time no matter what your financial situation is. Taxes are like a game of golf; you work hard on the green just to end up in the hole. So, step back and breathe. Tax season is almost over!
