Are You Taxed by Your Taxes?

December 29, 2007

No one looks forward to paying taxes, unless they are 100% sure of getting a refund.Ã‚Â  If so, the forms are filed the minute all the necessary paperwork has been received.

On the other hand, the people who anticipate owing taxes generally wait until the last possible moment to file.Ã‚Â  Thus, they are essentially taxed twice. Why?

Although we naturally budget for bills and other household expenses, many individuals fail to budget properly for their portion of income tax.Ã‚Â  Thus, when tax time comes around, they are taxed emotionally and financially to meet they obligation to the IRS.Ã‚Â  After all, we have all heard the old saying that the only sure things in life are death and taxes.Ã‚Â 

If the IRS is owed, it expects to be paid on time.Ã‚Â  If a citizen is late in remitting taxes, the interest and penalties can be astronomical.

So, if you are one who feels taxed in more ways than one, here is a little bit of advice:

1.Ã‚Â  Think of your taxes as an expense, much like utilities or a car payment.

2.Ã‚Â  If you owed taxes after filing out your forms last year, change your deductions.Ã‚Â 

3.Ã‚Â  If you are already claiming zero deductions, have an additional amount deducted throughout the year.Ã‚Â  (What you don’t see in your paycheck, you won’t miss.)

4.Ã‚Â  If you have children, start a tax free educational account.Ã‚Â  The money will not be taxed if used for your child’s post-secondary schooling in the future.

5.Ã‚Â  You can also contribute to charities. As long as the charity is registered as a non-profit organization with the federal government, it can also help reduce your tax bill, as well as helping the less fortunate.Ã‚Â 

How do you keep from being taxed by your taxes?






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2 Responses to Are You Taxed by Your Taxes?

  • Msminiducky

    I have a few methods to cope with taxes:
    1. Contribute as heavily as I can spare to pre-tax accounts like 403(b), 401(k), and FSA to reduce taxable income.
    2. Have my train tickets taken out of my paycheck automatically because up to $1200 is taken from pre-tax monies.
    3. Automatically take out 25-30% of all untaxed income and set it in a savings account specifically to pay taxes with later.

    I have some friends who elect to have zero deductions PLUS a percentage of taxes taken out of their paychecks, as well.


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