It’s a rare duck that likes to pay tax to the state or federal government. Unless you are rich, you kind of have to. Jokes aside, it can be confusing, and staying on top of it is challenging for some people. So, what can you do? Well, with some forethought and organization, it isn’t actually as hard as most people think it is.
Use Online Portals Whenever Possible
You can do almost anything online these days. Book a vacation, shop for groceries, and, of course, pay taxes. However, before you get too excited, not everywhere allows you to do this. But with the widespread adoption of specific systems, your local and national treasurer might accept tax returns and payments. The UK’s online HMRC tax system is a shining example of the government getting it right when they’re taking your money. And you don’t even get a thanks.
Tax Tips for Recording Income
There’s so much data when it comes to filing a tax return that it’s shocking you don’t end up vomiting ones and zeroes. However, with so much information required by the tax office, it is best not to leave it too late. Depending on your personal circumstances, this might need to be done thoroughly – 32% of people leave it late. It is much easier to deal with when recording all income. A spreadsheet with transactions is enough and you can send this as part of your return.
List Business Expenses
It’s not all doom and gloom as the tax man scrutinizes your income. There is some good news in that there are a lot of things you can write off. Yay for the small wins. For example, you can write off anything that is used for purposes in the UK. This includes charitable donations, office furniture, and software licenses. Of course, this varies by country, so check before you claim for everything. If in doubt, accountants will be able to offer some advice about tax write-offs.
Use Apps to Stay on Top Things
You know by now there’s an app for everything. Of course, there are apps for staying on top of taxes. In fact, these were some of the first. But why should you fork over more money on these:
- You can access all the info you need on the go and from anywhere.
- Almost all apps are quick and easy to use for last-minute banking.
- Apps allow you to organize different data sets for what you need.
- Most modern apps offer some kind of automation, such as transaction recording.
- You can set goals and track your progress towards meeting those goals.
In short, financial apps just make the books easier. Standout apps like Quickbooks are a Godsend and can even link to your bank account. This records transactions for quick export.
Learn the Tax Return Dates
As mentioned, a lot of people file their tax returns just in time. But what about filing late? This is something you really don’t want to do. A late tax return carries harsh penalties. These penalties also get worse the longer you leave it. And the tax office doesn’t care about the circumstances and doesn’t accept excuses. So unless you want hefty fines and possible time in prison, make sure you get the tax return filed. Learn the dates you need to file and, of course, pay.
Side Hustle Tax Tips
Side hustles are an excellent way to help make ends meet. All over the world people are making extra cash with enjoyable and profitable work. In the US alone, 44% of Americans do some kind of side hustle. Popular ones include selling stuff online, writing for a living, and even taking surveys. These are usually paid directly to you via services like PayPal. But be aware that you are required to pay taxes on income earned in this way. Check with your tax office for details.
Always Be Honest
The worst thing you can do is lie or be a little misleading when it comes to taxes. You might think that with millions of returns to assess, that they won’t check. But they do! Maybe not this year, perhaps not the next, but eventually, lying about taxes will catch up with you. Remember Al Capone? Yeah, he was known for several murders. But you know what put him away? You guessed it; not paying tax! If you are unsure, then hire an accountant to file tax returns for you.
Summary
Using online portals to pay and file taxes in a fast and convenient way is one of the best tax tips of today. There are also apps you can use to record transactions that allow you to send these with your returns. And the best tip is to always be honest about income when it comes to taxes.
