Taxes might sound boring, but they’re like that one boss level in a video game—you gotta beat it to move on! The Wall Street Journal dropped some tax tips that adults – anyone with a job, really – should know before the IRS comes knocking.
Here are Five Fast Facts about basic tax tips:
- ⏳ Be Timely - Uncle Sam wants his money, and he wants it on time. You might be able to delay or reschedule a doctor’s appointment, but YOU SHALL NOT PASS the tax deadline! Doing so will land you some extra interest fees and penalties.
- 💲 Tax Brackets - Know which bracket you’re in so Uncle Sam doesn’t take more than he should. And while he demands you be timely in your payments…the same is not necessarily true of his refunds.
- 😮 Retirement Taxes - Taxes on retirement or investments often have very specific parameters that make a huge difference. For example, holding stock for 366 days rather than 365 days makes your capital gains tax jump from 15% up to 24%! And depending on your age, you may want to save in a Roth or Traditional IRA because the tax situation is very different. There are no do-overs if you mess it up, either!
- 💵 Side Hustle Taxes - Side gigs mean extra cash...and extra taxes! Make sure you hold back a portion from the cash you earn today, or you’ll have to pony up extra next April.
- 👍 Tax Credits - Don’t miss free money! There are lots of tax credits available depending on your situation. If you have kids, are married, make more (or less) than a certain amount of money, if you have lots of charitable giving, and so on. Work with your tax professional to maximize those very legal loopholes!
🔥Bottom line: Handle your taxes now or pay later. The US government pays close attention, so you absolutely, positively cannot ignore tax deadlines or problems! Remember, Al Capone outmaneuvered all of the law enforcement agencies who chased him except one…the IRS.
What’s your best tax tip?
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