Preparing for tax season often seems more like a sprint than a marathon. You receive your W2 forms in the mail in late January, and then it's time to excavate your receipt shoe box and spend a stressful weekend trying to make sense of your tax return. All in all, it feels like a hurried, overwhelming, and nerve-wracking chore that you dread every year.
But what if filing your taxes didn't have to be quite so stressful?
The trick to making your tax season a breeze is preparing for it early. As in, right now. If you want an easy and relaxed tax season, here's what you can do now to get ready.
One of the most frustrating moments in tax preparation is discovering you're still missing one vital piece of information after you've gathered everything you thought you needed. And it's even worse if you don't know how to find the missing information.
So look over the specific info you need to file now, to give yourself time to gather all the items well before Tax Day. Specifically, you'll need:
Putting together your list of necessary information and checking each item off as you gather it will ensure that you're fully prepared when you finally sit down to file. (See also: The 7 Most Common Tax Questions for Beginners, Answered)
Keeping track of tax-related receipts throughout the year is one of the most difficult parts of handling your taxes. Many people throw all of their receipts for work-related expenses, charitable donations, mortgage payments, medical expenses, and interest statements in a single folder or box to deal with "later."
Now is an excellent time to dig out your receipts and start organizing them according to category. Having your receipts neatly separated now will make it easy to sort the last few that come in as the year comes to a close, and can help you get into the habit of putting them in order as you receive them.
Though the majority of filers will receive either a W2 or 1099 form from their employer(s), it's still a good idea to gather your paystubs before the end of the year to get a rough idea of your income. That will help you identify any potential mistakes on your W2 or 1099 forms as soon as they arrive. It's far better to catch a mistake early rather than find you need to request a corrected form close to the IRS deadline.
Plus, checking over your paystubs all at once gives you a chance to take a look at your federal and state tax withholding over the year, as well as any pretax contributions you've made to your 401(k) or IRA.
Another great reason to look at your paystubs now is that it gives you a chance to review your W4 with your employer.
The W4 form determines how much tax withholding is taken from each paycheck. If you expect to receive a large refund this year, you can adjust your withholding allowances now to ensure that more of your paycheck will come home with you in 2020. If, on the other hand, you worry that you may owe money because you didn't have enough withheld, now is a good time to adjust your W4 to be sure you don't have the same problem in the coming year. (See also: Are You Withholding the Right Amount of Taxes from Your Paycheck?)
If you have access to a tax-deferred retirement account like a 401(k) or an IRA, now is the time to see how much money you have set aside this year, and try to increase that number.
As of 2019, workers under 50 years old can save up to $19,000 in a 401(k) and up to $6,000 in an IRA. And every dollar you put into these kinds of accounts reduces the amount of income you have to pay taxes on.
Now is an excellent time to try to maximize your 2019 contribution. You have until the end of the calendar year to maximize your 2019 401(k) contribution, but you can continue contributing to your 2019 IRA until April 15, 2020.
Getting into the habit of increasing your contribution now can also help you reach the maximum in 2020, which is going up to $19,500 for 401(k) accounts, although the IRA maximum will hold steady at $6,000. (See also: 8 Tax Return Mistakes Even Smart People Make)
If you expect to receive a refund this year, start thinking about the best way to use the money now. We tend to think of a tax refund as "free money," even though it's just your own salary being returned to you. But with a free money mindset, it's very easy to go overboard spending the refund on fun stuff, like a vacation or a new gadget.
There's nothing wrong with enjoying your tax refund, but taking a hard look at your budget and finances now can help you to determine if having fun with your refund is the best use of the money. Is there some debt you could pay down (or pay off) with the refund instead? Or is there a major goal you're saving toward — like a down payment on a house — that would benefit from an injection of cash?
Thinking through the best use of your tax refund before you have it in your hot little hands makes it more likely you'll make good decisions with it. Once you have the money in your possession, it's very tempting to make it rain instead of saving for a rainy day.
Getting a jump start on your filing chores will not only make tax season much easier, but it can also help you prepare for your finances in the coming year. Start 2020 on the right financial foot by starting your tax season preparation early.
Yes, turning your water heater off when you’re not going to need hot water will save you money—but you may have to wait awhile before you have hot water again. It’s definitely worth it to turn it off while you’re out of town, and you may also want to invest in a water heater timer, which is like a programmable thermostat for your water heater. A better option, however, is turning down the heat!
You never use your water on full-blast hot anyway (140ºF!), so it’s worth it to lower how hot you keep your water heater. You can save up to $125 per year by simply lowering the thermostat on your hot water heater from 140º to 120º F—and you probably won’t even notice the difference.
A water heater insulation jacket (also called a blanket) costs $15–$35, but it can cut the cost to heat your water dramatically. By insulating your water heater, you’ll cut down on the amount of energy it needs to use to heat standing water in half, also cutting down on the amount you need to pay. To find out if you need a water heater jacket, touch the side of it. If it’s warm, it’s leaking energy. You may also want to insulate your hot water pipes.
Make sure to drain your water heater once a year to get rid of sediment. Left too long, this grit can build up until you’re using energy to heat sludge. Flush it out to use less energy and save.
Cut down on the amount of hot water you use by washing your clothes in cold water with a cold rinse. Due to advances in detergents and washing machines, the only time you really need to use warm or hot water is when you need to get a really bad stain, like red wine or oil, out of an article. Not only will you help the environment, you’ll save money on heating the water, too.
For more ways to save money from all over the internet, check out our Saving Money board on Pinterest. And don’t forget to sign up for our newsletter and follow us on Facebook!
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Bruce Lubin is the co-author of the best-selling Who Knew? series of household hints books, with his wife Jeanne. They’ve written more than a dozen books that have sold more than 5 million copies.
You may have seen Bruce sharing his clever and money-saving tips on national TV, like the Today Show and the Hallmark Channel. Now, Bruce and Jeanne are also hosting a brand new podcast on the Quick and Dirty Tips network, which goes by the same name—Who Knew?.
[Listen to the interview using the audio player in the upper right sidebar of this page or on iTunes, Stitcher, and Spotify; for Spotify, just search the app for "Money Girl."]
Free Resource: Laura's Recommended Tools—use them to earn more, save more, and accomplish more with your money!
Some of the cool tips Bruce and I talk about in this interview include:
See also: How to Save Money on Your Electricity Bill
No matter if you own a large house or rent a cozy apartment, this interview will help you cut the cost of energy and water and save money on your utility bills. Here are a few great tips from our interview:
With today’s high efficiency dishwashers and washing machines, the expense is really heating the water. So wash everything as cold as you can.
Q: What are the appliances that suck the most energy? What are some tips to use less energy with them?
Bruce: Dishwashers, but it’s really the dry cycle, which uses steam. De-select the Dry Cycle, or, if you have an older dishwasher, just open the door at the beginning of the dry cycle.
Dryers too—use a large towel to reduce drying time. Check your dryer’s screen: the lint from the screen in your dryer may not be enough to make sure it is running as efficiently as possible. The fabric softener used in dryer sheets can get caught in the mesh, even if you can’t see it. To be sure you’re completely cleaning the screen, remove it and clean it with warm, soapy water and a brush. Leave it out to dry completely before placing back in your dryer.
Q: What about saving water?
Bruce: Back to dishwashers—you should actually wash pots and pans by hand (usually)—you save up so much room and you don’t have to do Pots ‘n’ Pans mode.
With today’s high efficiency dishwashers and washing machines, the expense is really heating the water. So wash everything as cold as you can. You also may want to lower the temp you keep your hot water heater at. We recommend 120º F, which is plenty hot, even though many water heaters come set at 140º.
Other than that, low-flow showerheads and other faucets are a must! Definitely worth the price. Just ask at the hardware store.
Q: What about teenagers taking long showers?
Bruce: Give teens an incentive to take shorter showers—5 minutes added to their curfew for every 1 minute they shave of their shower time. (Or 5 minutes more of time with their phone at the end of the night, etc.)
Q: What about tips for saving money on air conditioning?
Bruce: Keep blinds closed during the day – people probably know that! But also, close all closet doors, and seal off rooms you aren’t using. Use duct tape if your vents don’t close. And, make sure your windows and doors seal properly—that can save you big.
Q: Any other tips for saving energy?
Bruce: Believe it or not, MOST electric companies charge you more for electricity during peak times, which are usually between 4 and 8pm. Google the name of your electric company and “peak pricing” to see if yours does. If possible, keep your AC off during these times, and do more laundry and other electricity-intensive tasks during non-peak times.
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Even when you’re not using appliances, they still continue to use energy. So pull the plug when you’re done with the blender, toaster, food processor, and even your television—everything except appliances that need constant power to preserve a special setting.
Did you know that you could be losing warm (or cold) air through your electrical outlets? We placed some fireproof foam insulation under our outlet covers and switch plates, and were able to save several dollars a month on our utility bill.
One of the easiest ways to save money on electricity is to turn off electronics when you’re not using them. To make it easier, get a power strip like the SmartStrip, which powers down devices based on the device’s usage. For example, when you switch off your computer, the SmartStrip will cut the power to your monitor, printer, and scanner as well.
If you’re trying to decide between deep or baby blue for your walls, you should know that lighter colors of paint well help you use less energy, as they reflect the light and heat in a room better than darker hues.
You may not realize that most electric companies charge more for power during the day than at night. Contact your local utility to find out whether this is the case in your area. If it is, make sure to do all your laundry, dishwashing, internet surfing, and other power-intensive tasks during off-peak hours. We noticed the difference on our electric bill, and you will, too.
Here’s a neat trick for keeping your house warm without spending a cent in the fall and spring: Pour water into mason jars or glasses (we use cleaned-out salsa jars with their labels removed), and line them up along your windowsill. During the day, the sun will warm the water, which will gently warm any air getting through your window at night. To make the jars even more decorative, add ribbons and bows, or add food coloring to the water for some pretty windowsill reflections.
Especially if it’s an older model, your cordless phone can use a lot of electricity. Keep your energy bills down by making sure you dim the lights on the display (if possible), and by not cranking up the volume, which can force the phone’s amplifier to work twice as hard.
Get more great tips on our podcast by subscribing on iTunes or Stitcher! You can also sign up for our newsletter and follow us on Facebook for our daily tips!
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Don’t pull a muscle trying to shove open a stuck heavy window! You may remember that opening a stuck window was one of our many uses for used candles. (You can also use a bar of soap). Get the candle or soap and rub up the metal tracks above the window. This should help lubricate it and make the window slide more easily. In fact, windows will open and close more easily in general if you occasionally rub a bar of soap across the track.
If the window is stuck open instead of closed, it’s the same thing, but in reverse: just grease up the track below the window so you can get it shut.
If heat or humidity has sealed your window shut, here’s how to get it open again: Hold a block of wood up against the frame, and tap it gently a few times with a hammer. Then move to a different place on the frame until you’ve tapped all the around the edges. You should now be able to easily pull it up.
If your sliding glass door is sticking, simply spray the tracks with furniture polish. It will remove dirt and give the tracks the lubrication they need to keep the door moving smoothly.
For home repair advice from all across the internet, check out our Home Repair Hints board on Pinterest. And don’t forget to sign up for our newsletter and follow us on Facebook and Instagram!
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The satisfaction of receiving a year-end bonus may soon be tempered by the realization that income taxes will have to be paid on the extra money. Bonuses are treated as income and thus subject to taxation, but there are ways … Continue reading →
The post How to Avoid Paying Taxes on a Bonus Check appeared first on SmartAsset Blog.
Every year, people’s lives change in ways that affect their taxes. They may start a higher education program or have a child, and others take on elderly parents as dependents. These situations can change their eligibility for tax credits. In … Continue reading →
The post A Comprehensive Guide to 2020 Tax Credits appeared first on SmartAsset Blog.
Does this sound familiar? You start the holiday season feeling festive and full of good cheer. You have big plans and ambitions to make everything merry and bright for you and your family. But as your to-do list grows, so does your stress level. The next thing you know, you just want to settle in for a long winter's nap and not come out again until spring.
Even before I became a mom, I wanted nothing more than to give my family the gift of the most magical holiday season possible. First, I had to orchestrate amazing decorations. Then I would not only make festive treats but plan elaborate five-course meals. And let's not forget shopping 'til I dropped so I could shower my friends and family with impeccably wrapped, showstopping gifts!
I spent so much time and energy trying to pull off the perfect Christmas that, come December 25, I was run so ragged I hoped to never see another candy cane for the rest of my life. I would collapse after the last gift was unwrapped. Fa la la la la la la la ... ugh.
Each year I vowed to be smarter with my time and efforts, but I still wound up mindlessly repeating this vicious cycle. That is, until I was expecting my fifth child. Seven months pregnant, I ended up with pneumonia and a cracked rib. As miserable as I was, it was the year I received the best gift ever—the doctor ordered bed rest!
I had to rely on my husband and the grandparents to take over so that our kids would still have a Christmas. By no means did they do everything the way I would’ve done it. (Actually, they did nothing the way I would've done it!) But by letting go of the control, I watched a wonderful holiday unfold. I finally wasn’t in the trenches driving myself crazy trying to create a perfect holiday. Instead, I was living in the moment.
I knew right then that I was finally done with all the holiday hype.
I still enjoy the magic of the holiday season, but now I approach this time of year with much less fuss.
If you've realized that spending time with loved ones is more important than pulling off the "perfect" holiday, think about what you can cut back on this year.
Center your time and energy more on the things you actually love doing and less on those that feel like a chore. You’ll automatically simplify this hectic time of year.
I’ve always been a Christmas junkie! Whether it's enjoying all the lights and bling of the season, soaking in the enchanting sounds and delicious tastes that surround us, or decking the halls—count me in. Being mindful of the elements that make this time of year so special can deliver an entirely new experience for both you and your loved ones.
Instead of rushing from one errand to the next, tap into your holiday senses so you can be more present this season. Here are some festive, low-key ideas.
Bake with your kids. Find an afternoon where you can roll out some sugar cookies, decorate a gingerbread house, make homemade fudge, or dabble with delicious peppermint bark. Notice how amazing your house smells while these goodies are baking. Enjoy an ice cold glass of milk as you nibble on a delightful iced gingerbread man. Make an extra dozen or so for your neighbor and leave them as a surprise on their front porch. Savor the experience. Check out these yummy holiday recipes on Food Network.
Get crafty. Watch your child swell with pride when they create a special masterpiece for Grandma and Grandpa. Head over to Pinterest for hundreds of easy, jolly ideas. In our house, our favorite DIY holiday dÃ©cor is paper snowflakes. Even my college kids love to make these every year. We sprinkle a little glitter on them and decorate our windows to create a real winter wonderland feel.
Play holiday tunes. Get in the spirit by playing festive music first thing in the morning. When your kids get up, they can jingle all the way to the breakfast table. Sing along with Frosty the Snowman as you carpool to practice. Let holiday music play quietly in the background on Christmas Eve as you prepare for the excitement of Christmas Day.
Check out holiday light displays. Take a brisk early evening walk through your neighborhood and enjoy the beautiful glow of holiday lights. When you get home, make some creamy hot cocoa and talk about which scenes were your favorite. Or drive through your community to take in the festive displays. Soaking in the holiday bling can illuminate positive energy and it’s a low-cost way to spend some time together as a family.
Watch holiday classics. Pick a cozy afternoon or evening and binge-watch your favorite holiday movies together. Don’t forget the popcorn!
RELATED: 7 Ways to Save Money During the Holiday Season
One of my favorite parts of the holiday season is celebrating the traditions we’ve created over the years. There’s something comforting about practicing a tried and true ritual that belongs to your family.
My parents established a fun tradition—Christmas Eve PJs! We opened them before bed each year.
When I had my own family, we continued the tradition. But I incorporated a theme each year like footed pajamas, Star Wars, Polar Express, or our favorite sports teams. This year we’re getting reindeer pajamas, and yes, they will come with antlers!
The beauty of a traditions is that you can start them any time. Here are a few ideas to get your creative juices flowing.
RELATED: 6 Ways to Create Family Traditions
The average American will spend $700 on holiday gifts and goodies this year, totaling more than $465 billion nationwide. Yikes!
Don’t get me wrong, I love watching my kids open their gifts on Christmas morning, particularly when the gift is some pricey item I know they weren't expecting. But gifts are not what the holiday season is all about.
Experiences are a great alternative to material gifts. We started doing this years ago, and my kids look forward to receiving things like concert or sporting event tickets, a family weekend away, or private lessons more than a new electronic gadget. One year we gave them bedroom makeovers and let them pick out their color schemes!
I recently attended a wellness workshop and one of the speakers focused on one of the most neglected, free assets available—mother nature.
If you live in a climate where winter weather is getting into high gear, it may be tempting to limit your time with nature to climbing in and out of the car. But winter is a wonderful time to get outdoors and enjoy the fresh air. Embrace a walk in the new-fallen snow, take your kids to an outdoor ice-skating rink, or hike on a nature trail and take in the frosty landscape. A walk on the beach in the winter can also be invigorating. With fewer people around, you can have some quality time with your own thoughts.
Most parents focus on making things fun for their kids throughout the holidays. The decorating, baking, shopping, and constant running around seem to be for everyone but ourselves. Instead of waiting until post-holiday exhaustion sets in, use the holiday season to reconnect with yourself.
Finding quiet pockets of time throughout the week may seem like a laughable concept, but if you put your mind to it, you’d be surprised at the different ways you can sneak some me-time into your schedule.
Give meditation a try. Listen to an inspirational podcast or captivating audiobook that takes your mind away from the daily annoyances you have little control over. This well-spent me-time will help you to relax and get into the true spirit of the season. You may also learn something new!
The next time you get a package that contains bubble wrap, save some for your produce drawers. They’re the perfect liners for the bottom of your fruit and veggie compartments because they keep produce from bruising, while keeping cold air underneath them. Plus, when you need to clean your fridge you can just remove and replace the bubble wrap!
You just dug out last spring’s heels from the back of your closet, but they look like they’ve been flattened by a truck! Reshape your shoes by stuffing bubble wrap into your shoes until they’re back to their normal form. Leave inside your shoes for a half an hour and they’ll be permanently back to their old selves again!
No wire hangers, ever! Wire hangers are often free from the dry cleaner, but they’re barely useable—they create unsightly creases and sometimes do permanent damage to clothes. However, if you have a bunch of bubble wrap, you can make DIY padded hangers: Simply wrap a sheet around the shoulders of the hanger and tape to secure. They won’t look fancy, but they’ll work just as well as the expensive kind you’d buy at the store.
Packing for a trip? Keep your necklaces safe and tangle-free by laying them out on bubble wrap, then taping the ends to the bubble wrap with some Scotch or masking tape. Then simply roll the bubble wrap up and pack safely in your suitcase!
Instead of buying an expensive lumbar cushion, make your own with bubble wrap! Using a roll of bubble wrap, tightly roll up a portion lengthwise until you reach a thickness that will rest comfortably in the small of your back (a few inches thick). Next, thread a length of kitchen twine through the center and tape the roll shut. Fasten to the lumbar region of chair with the twine, and when you sit make sure it supports your lower back, so you improve posture and reduce pain.
Cut down on heating costs and keep your loved ones warm this winter by insulating your windows with bubble wrap. It’s free, and works even better than the plastic window insulations you can buy at the store. All you’ll need is the bubble wrap, a scissor or utility knife, and a spray bottle filled with water. First, cut the wrap to fit the size of your windows. Spray a layer of water on the windowpane, and press the bubble wrap against it so the bubble-side is against the glass. The wrap will stick to your windows all winter long, just like that! If your bubble wrap needs extra adhesive help, use double-sided tape to keep it in place.
For more second uses for everyday items from all around the internet, check out our Clever 2nd Uses board on Pinterest. And don’t forget to sign up for our newsletter and follow us on Facebook and Instagram!
Image courtesy of Who Knew?