tip of the week: don't tax yourself

If you have watched any television lately, you have undoubtedly been bombarded by the numerous commercials confirming that this is in fact tax season. It seems to me that this commercials have increased over previous years. With the month of January behind us, everyone should have their W-2's and all other necessary tax documents. I am not qualified to give anyone advice regarding specific tax issues, but I thought I'd share three basic, general tips.

1. Don't Delay - Many people wait for the April 15th deadline to creep up on them to file their taxes. I have no stats or figures to prove it, but I would be comfortable arguing that tax season brings procrastination to its peak. So, let's say you beat the deadline. You're now in line with millions of other procrastinators waiting for your return. The sooner you file your taxes, the sooner you get your money. If you file early in the tax season, it takes only a week or two for the money to find its way to your bank account. The only excuse for procrastinating is when people know they owe money...delaying the inevitable. Those people should reassess the amount they're paying in taxes to start with, but this is the only good excuse I can think of. If you anticipate getting money back from the government, don't delay your cash flow. File your taxes ASAP. I submitted all my tax documents to my tax person before January was over. This brings me to my second tip.

2. Go to a Professional - Many people insist that they know what they're doing and they are completely capable of e-filing on their own. Some of those people are probably right. Most are probably hurting themselves. Now, I'm not recommending that you go to big companies that hire people just before tax season, putting them through minimal training. I went to a place once where I felt like I knew more about my taxes than they did. But there are many people and businesses who are educated on taxes and who are much more qualified to prepare them than the average person may be. I know some people who have gotten back a lot more than they usually do once they finally gave and seek professional help. I also have known people who owe more than they thought. Since we can't claim ignorance in disputing a fine from the IRS, it's better to file your taxes accurately. It costs money to use a professional, but it typical pays off in the end when you do use one (whether your getting or paying money).

3. Don't Spend it All in One Place - Many people pick a big ticket item they have been wanting and use their tax money to buy it. If you are comfortable financially then that's a practical idea. But if you ever find yourself needing a little extra money each month, you might be better served to put your tax money into a savings account and use it as you need it.

I'm in no place to tell anyone what to do, nor would I try to. You can choose to take or leave these tips. My hope is that they may assist at least a couple of people.