How to save money in 2011: Part 5
Today I'm writing about taxes. Such a dirty little word to so many people. It is not my favorite word as we just wrote 2 checks for our property taxes. Here in Texas, property taxes are a small fortune!
Moving on...property taxes are not the point today. :)
Many people ask if I do my own taxes. The answer is that I can and I have, but I don't. It is worth the price to send it to an accountant. He always knows all of the new laws (which change EVERY year) and has always gotten us more back than if I would have done them. His fee pays for itself with the return.
Tax time tips:
Keep your receipts! If you purchase ANYTHING medical related, always keep your receipts. Keep your doctor visit receipts, pharmacy receipts, etc. This will be a huge help at tax time!
Keep up with everything! I keep a 3 ring binder with tabs and separate folders to house the receipts throughout the year. That way I can just go back and tally each category up. Receipts can easily get out of hand if you don't have a system in place!
Add it up! So many people assume they don't have enough to itemize. However, they don't take the time to do the leg work. Honestly, I spend HOURS just getting our stuff ready for the tax guy. If I don't produce the numbers (and proof), then he has no idea that we spent $1000k on dr. visits or $893 on pharmacy items, etc. Don't forget to include if you pay out-of-pocket for health insurance. For us, this is a HUGE expense. It made me sick when I read the actual number for 2010. I'm now in the process of trying to find new insurance again. More on that to come!
Adjust Tax With Holdings
*We changed my husband's with holdings so that we would get more money each month and not a large income tax refund. Why would we want to give the Federal Government an interest free loan when we could be accumulating interest? Put that extra money directly into savings. So many people play around with their income tax money as if it were "FREE MONEY". It is NOT free money, you earned it and it should be respected just as the other money should. This is a great time to give your savings a little boost!
Hope this helps as tax time is here! At the very least, you can be ready and organized for 2011. One last thing, tithing is a big incentive at tax time! We have always tithed and have always been able to itemize our taxes. Plus we've always gotten a tax return. I want to be very clear here...We don't tithe specifically for tax purposes. We tithe because we want to honor God and put him first in our lives and our finances. We also want 100% of our money to be blessed by God and to be obeying His word. I'm just simply stating that it is also a tax incentive. Truly, you can't out give God.
Happy Valentine's Day!