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Software such as Turbo Tax or even the fees you paid to a tax professional such as H&R Block or your accountant can all be deducted in your following year taxes.
To find more information about itemized deductions check out this page on the IRS website.
So we’re all about to get into the thick of tax season, right? If that’s not tough enough on a body by itself, it normally also gets us thinking about ways we can be trimming the excess in our budgets, especially if you’re like my family and actually have to pay the government AGAIN.
Ok, nope, this is NOT a rant about the IRS, though you can probably find one of those on HotCouponWorld.com’s Hot Under The Collar section. THIS article is about keeping track of where you spend your hard earned dollars so that you don’t end up at the end of month wondering where in the world all your dollars went. Before you can cut your expenses, you need to know exactly how you spend your money.
Whether you are tech-savvy or not, here are a couple of methods for keeping track of your daily expenditures.
First, there is the time-tested method of keeping your receipts. Easy enough to do, but at the end of the month, it requires that you add everything up to see where everything went. If you go with this method, then you need to have a place to put your receipts that will keep them out of the way in your home and you need a filing system to organize your receipts.
If you are using this method, you need to pick up an envelope-type coupon organizer at the dollar store. You can carry that around with you and immediately file your receipt away as soon as you get it. Then once a week or more often if you are so inclined, enter your receipts into your books at home. Programs like Quicken will help you out a bunch. Once a month or so, go through the organizer and make sure you have all receipts entered, then empty the organizer. Find yourself a shoebox and file them away-just make sure you do keep them somewhere for tax (and REBATE!) purposes. Your task will look much less daunting if you only have a few days or a couple of weeks’ worth of receipts than if you have 3 months’ worth.
The Neat Company has a really cool tool called NeatReceipts. Check it out at www.neatreceipts.com. NeatReceipts is a mobile scanner that inputs your receipts. It categorizes your expenses. It keeps digital copies of your receipts for tax time too. This program has a tool that will extract information directly into Quicken, TurboTax, Excel, or QuickBooks. Talk about doing all the work for you! You can save 50% on a Neat Receipt scanner at Amazon for just $124.99 - a savings of $75 over the regular price of $199.
If you don’t have the money to spend on Quicken or something similar, search for free budgeting tools. There are plenty of offline downloads to help you keep track of your expenditures. The downside to some of these programs is that they require you to have the discipline to sit down periodically and enter your receipts or transactions and categorize them yourself, which I am not able to do. I get tired of all the receipts around my house and throw them all in a box, lock, stock and barrel. However, if you can keep up with all of that, these programs can and will work for you.
If you don’t want to deal with each individual receipt and you just need an overview of your budget and how you spend your money, check out www.mint.com. Mint is a neat little program that hooks to your bank account and automatically categorizes your spending from the moment the money leaves your bank account. You can find discussion about mint.com on the Hot Finance Discussion section of HotCouponWorld.
Mint takes a comprehensive look at all of your bank accounts and if you wish, credit card accounts. Year to date info is available at the click of a mouse, and the program shows you your spending trends as well. Using my custom budget that I created on Mint, I can tell at any time how much of my grocery/clothing/fuel/entertainment money I’ve spent. Oh, and if you have a dangerously low balance, Mint emails you to let you know.
All you need to get started is one of your checks, a credit card statement, and statements from any other accounts that you might want to incorporate.
You don’t have to worry about hacking on this website either, or selling your information to other companies. The information you give them is encrypted, and they specifically state that they do not share your information with outside companies. I’ve been a member of Mint for months, and I haven’t gotten any junk mail or spam from them at all.
And, I can tell you that I spend WAY too much on joe.
Tax season is upon us, and really, it’s one of my favorite times of year, even if I owe money to the IRS. I know, that sounds strange, but it gives me a chance to clean through a ton of paper, file, and organize my house a bit. Plus, in the years I get refunds, I like tearing through it to get my refund quickly and put it to good use.
One thing I don’t do no matter how badly I want/need my refund is to use a tax service that advances me my refund. Here’s why….
The “rapid refund” type services are in the business of making money by taking a percentage of your refund as a loan fee for service. It goes without saying then that there are some services out there that are going to find ways to get you the largest refund out there they can, and some have been known to use unscrupulous tactics to do it, leaving you open to an IRS audit. The more they “find” you, the higher their cut of your tax refund.
If you can file in a quick enough manner using a reputable service like Turbo Tax, and you have it set up to electronically deposit your funds into a checking account, you can receive your tax return from the feds in as little as 9 business days. When all’s said and done, even if you’re facing a tough time with money, waiting that few extra days can save you as much as 10-20% in loan fees, keeping all the money in your pocket. Turbo Tax is free to e-file your Federal taxes if you have a very basic tax return, and if you wind up having to upgrade to a paid version, the money you’ll spend will still be cheaper than the refund loan.
Even worse are the refund loans that front loads the balance on a pre-paid Mastercard. HR Block, whose Tax Cut software is similar and comparable to Turbo Tax, offers the pre-paid Masercard as an option for getting their Refund Anticipation Loan product. The fine print is that there may be additional fees on top of the loan fees. So if you feel you have no choice but to go down the refund loan path to get your tax return this year, don’t let anyone talk you into the pre-paid Mastercard option - it will only eat even more of your hard-earned money.
Ultimately, you need to do what’s best for your family. But the technology and software available to do your own taxes and get a rapid return on your own has cut the tax return process down to less than two weeks for most federal filers (your state return could take longer). If you need to do the refund loan option, stick with a reputable firm and not a fly-by-night outfit. HR Block might be your better choice. But if you can hang tight for the money, you’ll do better in the long run by filing on your own and waiting the few days for the IRS to direct deposit your funds. You’ll save several hundred much needed dollars that can go a long way towards paying bills or buying much-needed household purchases.
Our top three choices for do-it-yourself tax software:
For more information about tax filing for 2008, go to www.irs.gov.
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