Serving Bread

A few weeks ago, I mentioned that filing my taxes is helpful in caring for my personal finances. Most people probably hate doing their taxes for many reasons: it’s cumbersome and confusing. Our tax system is very complicated, which is the reason why I enjoy doing them.

When I’m filing my taxes, I am able to have a better sense on how the government views my money and how it wants to tax it. As I’ve filed my own taxes over the past 10 years, I have learned more about the tax system and I can prepare better over the course of the year how I spend my money and how to take advantage of the various tax breaks available to us as a family.

I recognize that we can familiarize ourselves with the tax system without having to do our own taxes, and if that works for you, that’s fantastic. I personally have learned more by doing my own taxes (and these days, with electronic filing capabilities, it’s not too difficult to file your own taxes).

Some tips to do your own taxes:

• Spend a day to collect all necessary paperwork. I have a big folder where I put all of the necessary forms to file my own taxes. This includes W2s, 1099′s, 1098′s, etc…
• Purchase one of the eFile programs such as Taxcut or TurboTax.
• Set aside an entire day to fill out the program. If you feel stuck, search on the internet for a particular term and how it may apply to your situation.
• After you are done going through the program, do not file your taxes with the IRS. Wait a couple of weeks before you file to allow you time to remember if you forgot anything during the filing process. This was important for me last year when I realized I had missed a couple of deductions that eventually saved me a couple hundred dollars in paying taxes.