This will be a very short blog. Every year we see a splurge of tax returns during April. Do we really need to wait this much long to file our taxes? I can give my personal example, this year I filed my tax return in Early February, got $2.5K back, invested in a high yield bond and now it’s market value is $2687.
Is it a nice decision to file your tax return as soon as the window opens. Do not wait for the April rush, and do not even think about requesting for exception. If government owes tax money from you, then it makes sense, but for most of us salaried employees, it just do not make sense.
Except few exceptions, employers generally tend to deduct enough taxes from your salary that at the end of the year when you calculate those medical expenses, home improvements, education and other eligible expenses, you will more likely to owe money from excessive tax paid from your salary.
As mentioned in the post highlight, you can invest your money as soon as you get it in your account, even if you invest in 1% saving bank account, you will get a pizza on the interest earn till month of April, just an example, not asking you to grab a pizza though.
All your financial institutions will issue tax documents online by the end of January, by this same time you can expect your employer to post W2 form as well. If you have all the documents, why should you wait?
Another gentle suggestion, self tax filing is one of the easiest tasks if you get the fundamentals clear. There are many sites offering free tax return (my personal choice is Tax Act, which I use every year for free filing) for free. May be they would charge for the first year, from subsequent year they will not charge for the service. But, be a bit careful, and do not opt for special features while filing electronic tax returns, they are designed to poke in to your wallet. Always save PDF file of your tax return in your local computer. It will save you a lot of time and a few extra cash while filing next year’s tax return. Also do write down the PIN number somewhere safe, it will again be asked next year while filing return electronically.
Let me extend a helping hand to my readers, if any one interested to file tax with tax act, you can contact me, and I can be your guide. No, you do not have to reveal any data or numbers to me, just ask objective questions and I would be very much delighted to answer your why, how, where questions.
Bottom line, you do not always have to be frugal to save more. A bit of research on your free time and bit of confidence can save you some big bucks as well.
Disclaimer: I am neither a tax consultant nor an expert, I do know how to use some of the tax filing tools/sites, please do not expect me to give you any tips on how to increase your claim amount or how to save more taxes.
Please leave a comment, if you have something to share or liked this blog. good night.