Tax season can be a worrisome time of year for some people. But it doesn’t have to be. With the right preparation—and having the right financial advice on your side—you can enter into tax season with confidence. To start, we’ve outlined how to save money before April 15th and beyond.
Work with a financial professional
First of all, getting your finances in order with a professional is a no-brainer money saver. At DEXSTA, our team of dedicated staff can help with everything from loans and credit to savings and checking accounts. As a member, you have access to secure banking and an online portal to keep your finances organized digitally––making taxes a breeze.
Beyond this, there are a few things you can do to save money and end the tax year with a bang (for your buck).
Adjust your withholdings
If you have a W-4 on file with your employer, you specify on this form how much of your wages are withheld for taxes. Although everyone’s situation is different if you owed more money than you thought last April, “you might want to go in and tweak it so you don’t run into the same problem next year.” Asking your employer to withhold more money per paycheck could mean you’ll get less of a tax wallop when April 15 rolls around again.
Calculate your deductions
If you work for yourself, you know that you can write off quite a few things to help offset your taxes. Some examples are your home office, office supplies, mileage, and even “the expense cost of section 179 property––up to $1 million.”
Deductions don’t just apply to self-employment, though. Other deductions include student loan interest, dependents, and marriage. In the case of student loan interest, for example, you can claim the interest payments you’ve made throughout the year up to $2,500.
Contribute to an IRA
Between the two types of IRAs––Roth and traditional––”you may be able to deduct contributions to a traditional IRA.” This means that your retirement contributions can potentially save you money both in the future and the current tax season.
Keep in mind that tax laws fluctuate, so the amount you can contribute and deduct can vary. Luckily, DEXSTA also offers Regular Share Certificates and IRA and ESA Certificates.
Pay down (or off) your debt
This one applies mainly to your post-tax season return. A good rule of thumb, and money-saving tip, is to use your refund toward paying down or paying off a current debt––such as a credit card or a loan. In the long run, this will equal more cash in your pocket.
If you decide to pursue a debt settlement before tax season, however, “you may have to pay taxes on the difference between what you paid and what you owed.” When it comes to saving money, timing is everything.
Trust your finances to DEXSTA
The above tips are just a sampling of ways you can save money during this and future tax seasons. Each person’s scenario is unique. While some of these tips might work for you, they may not apply to everyone. It’s always best to speak to a financial representative at DEXSTA to make sure you’re organized and prepared for tax season and beyond.