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Insights on money, career and trading

5 Smart Steps To Avoid Tax Trouble

Posted on March 15, 2016 by Daniel at 4:12 pm

The certainty of taxes can either fill you with a sense or dread, or give you a sense of peace knowing that they will always be there, year after year, to make you look at your financial journey for the past 12 months. But whether you rally against them or accept them as is, you still aren’t going to want to get into trouble because of them. And sometimes tax trouble isn’t even really your fault – perhaps you just weren’t paying enough attention.

But, in order to complete remove yourself from the possibility of tax issues in your future, there are certain steps that you can take, including recognizing the need for tax lawyers, realizing that personal taxes aren’t hard to do on your own, giving control of your business taxes to a professional, understanding dependents, and knowing the difference between types of tax forms.

Recognize the Need For Tax Lawyers

And though you might only consider the need for tax lawyers after you’ve already run into some sort of issue with the IRS, it’s not a bad idea to do a little bit of research on them beforehand. Think to yourself that if there was some sort of mix up, which tax attorney should you hire? Just understanding your options will help you get out of a jam later if you feel like you’re hurried.

Personal Taxes Can Be Done Fairly Easily

There are a number of DIY tax solutions for people who just have normal, personal tax needs for a year. And really, every year, those solutions – often some type of software – get better at guiding people step by step through their needs. It’s even often a good way to save money overall, as long as everything is straight forward.

Business Taxes Are a Different Story

Doing business taxes tends to be a lot more complicated, so that should often be left to the professionals. As long as you keep all of your administrative information in order, you should just be able to give those documents to an individual or company that specializes in business taxes. Perhaps some accountants would be able to do this for your business. Businesses in Chicago can always contact Porte Brown (visit their website here), for example, for help with their taxes. That could make the job a lot easier.

Understand the Rules About Claiming Dependents

One issue that many families run into is what to do about claiming dependents. That one simple number can make a huge difference in how much you pay at the end of the year, or how much money you get back. Make a careful decision to avoid trouble later.

Be Aware of Difference In Tax Forms

And finally, especially when just getting out on your own, knowing the difference between tax forms is going to be key in understanding and expecting different monetary amounts. There’s a huge difference between contract work and hourly wages, and a lot of tax trouble people get in eventually is because they don’t think holistically about how those forms will affect them come tax time.

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Insights on money, career and trading