A Painless Approach to Paying Taxes

posted on 28 February 2020
A Painless Approach to Paying Taxes
OK, maybe that headline was stretching the truth of this article, however, what you will learn is how to better prepare yourself when paying taxes. Did you know that income taxes were first introduced thanks to the Civil War? The US government began taxes citizens in 1862 and haven’t stopped since.

As adults we can’t run from taxes, here are some helpful tips when preparing:

  • Know the difference between tax-deferred and tax-exempt
    • Deferred means postpone paying taxes on investment earnings until you withdraw
    • Tax exempt means you will not owe federal tax on the earnings
  • Try not to make investments decisions just to escape taxes
    • Try to think about your financial goals
  • It’s good to think about your taxes all year long – yes, you read that correctly
    • Preparation to taxes is the key to financial benefit
  • Keep pay stubs, calculate your salary, check bank statements, dividend payments
    • Try to estimate your anticipated taxable income
    • Estimate taxes paid and what’s been withheld
  • As tax documents are collected throughout the year, it is important to put them in a place that is safe and that you can remember
  • The sooner you file your taxes the sooner you get your return
  • Evaluate your return and compare it to your tax goals
  • Tax goals are assessing what return or lack of and deciding to put more towards taxes during the year or to not put as much
  • If you have a large return you may decide to dial back the following year’s tax strain


Want to read more on hacks for tax preparation? Click the link