Ah, tax season. We meet again. This is my third year filing my own taxes, and let’s just say, my first two experiences were bumpy. (Multiple W-2s! Even more W-9s! Missing receipts! Moving from one state to another!) But this winter, I decided to approach my taxes like a grown-up (note the white button-up). In partnership with H&R Block, the tax preparation service that’s been around for more than 60 years, here’s how I tackled my April 18th deadline…
I decided to go with H&R Block’s new online filing option More Zero. It’s ideal for anyone with a relatively simple tax situation, and would work well should I decide to itemize my deductions. It’s also surprisingly quick and easy — you can even take a picture of your W-2 on your phone and then import its data directly into the program. Most important, H&R Block guarantees everyone their maximum refund. Bonus: It’s free!
It took me only 30 minutes to do my taxes, and I got a refund.
Overall, in life, I’ve been trying get more financially savvy, too. I’m happy to report it has been years since I raided my parents’ house and “borrowed” sleeves of Ritz crackers and string cheeses (sorry, Mom), but I want to figure out how to make the most of my earnings. In addition to H&R Block, here’s a three-step plan I’ve started that helped make my taxes easier…
I have a dedicated drawer at home where I keep all my tax forms, bank statements and other important papers. Now there’s no more debating whether an important document is scrunched in the back of my closet or in that one random folder under my bed (oops); if I ever need a document, I know exactly where to find it. Also, did you know that itemized deductions — like work expenses and charitable donations — can reduce your taxable income? I save all those receipts, too. (Here’s a list of common deductions; and if you’re not sure whether or not you should itemize, H&R Block‘s interview questions will help you figure it out.)
Make a Budget
Have you heard of the 50-20-30 rule? It’s a classic budgeting guideline I’m trying to use. It suggests that 50 percent of your paycheck should be reserved for fixed costs (think: rent, utilities, subway pass), 20 percent for financial goals (think: savings, investments) and 30 percent for flexible spending (think: clothes, impromptu Target trips). And in case I owe money to the IRS again, I won’t be unprepared.
Adjust When Necessary
When saving for a vacation or large purchase, I re-organize my budget accordingly. I figure out when I will need the money and make weekly savings goals until that time comes. Small things — like bringing my lunch (a fig jam and almond butter sandwich beats a deli salad anyway) or inviting friends over instead of going out — really add up. This year, I’m also using my refund for savings — the glory of growing up! Did you know about two thirds of taxpayers get a refund and the average amount has been about $3,000 for the past several years? I’d love to try to save my refund every year. (Check out this free calculator to estimate your refund.)
I still have a long way to go (retirement fund, I’m looking at you), but it feels good to be more proactive about how I handle money.
How do you manage your taxes? Do you have any tips for staying on top of your budget and finances?
(Photos by Ana Gambuto for Cup of Jo. This post is sponsored by H&R Block, which makes filing taxes a breeze. This post is for information only; everyone’s taxes are different. Thank you for supporting the brands that support Cup of Jo.)