If you’re anything like the average American, taxes make your head spin. Between deducting charitable contributions, adding dependents, optimizing data protection, addressing unique tax issues that affect your group, and having to meet all sorts of deadlines, taxes can be a chore no one wants to do. Yet it’s one we ALL have to do! Or face the very serious consequences of course. Here are some tips and tricks that might ease your worries during this upcoming tax season. Be sure to do additional research for your specific situation as everyone’s taxes are different.
Let’s begin with charitable contributions. While many Americans are vaguely familiar with the term, they might not realize what exactly qualifies as a charitable contribution. A charitable contribution is when someone donates to a qualified charity and then claims a deduction for that donation on their federal tax return. The IRS has a handy dandy tool called the Exempt Organizations Select Check that allows you to search for the charity you plan on making a donation to, in order to see if they are a qualified exempt charity. This way you’ll know which donations will allow to claim a deduction, and which won’t. For donations of $250 or more there’s a special rule. If you donate this very generous amount of money to a qualified charity you’ll need a written receipt from that charity. This receipt must include the following information; the amount donated, a description of the property given (if not a cash donation), and whether or not you received any goods or services in exchange for the donation. If so the charity will need to provide a description of them.
Did you know that the IRS requires you to report hobby income and expenses? This is something that many Americans don’t oftentimes think of but hobbies can also be a source of income. If you enjoy needle felting wool ornaments, painting custom birdhouses for your neighbors, or creating one-of-a-kind glass blown necklaces you may need to do some research on reporting hobby income and expenses during tax time. First you’ll need to determine if the activity that you enjoy so much would classify as a business or a hobby. The basic rule of thumb is this “Do you make a profit?”. The IRS takes into account nine key factors that distinguish a hobby from a business. You can do some further research on their website. Of course seeking the help of a tax professional from H&R Block wouldn’t hurt. Completely understanding the tax code is something that the average American just doesn’t have time to do.
Before you head off to your friendly neighborhood tax professional you may want to make sure that all your ducks are in a row. You don’t want to come to the office sloppy and unprepared. At The Container Store you’ll find everything you need to keep all of your most important forms, organized, in order, and easily accessible. They offer great deals on storage boxes, drawers, plastic bins and baskets, stacking storage, and so much more. The Container Store makes it super easy for you to keep your tax information in order and easily accessible for tax season.
In summation; be sure to do your research, take advantage of the many (mostly free) resources available to you from the IRS, seek professional help if necessary, and make sure to stay organized and you’ll be able to navigate the tax season with ease.