Category: How To Spend Your Tax Return

End of the Year Tax Preparation (Part Two!)

12/24/2020

In part two of this blog, we are going to be finishing up our recommendations on how to prepare for your end of the year tax prep. Our gift to you is to suggest that you get it done now so that when tax season is here in a blink, you'll be ready for it no matter what!

Hello Goose Creek and to all of our readers! As we are now sitting in the last few days of 2020, and we hope that this blog reaches each of you and helps you prepare for the coming tax season. We have always believed at Hoods that being prepared way ahead of time can not only save you huge amounts of stress and worry, but it can also potentially save you huge amounts of money. This year has been difficult, we've touched on it in almost every blog of 2020. This pandemic has been a devastating blow in more ways than one, and our finances have taken some of the biggest hits and blows. While there is still so much uncertainty about what is to come with the future of our finances, what is in our power now is to control what we do know and what we do have.

Being prepared can help make any transition or event that may or may not come from the government easier to deal with and easier to move forward with. Who knows what financial help we might receive between now at April 15th or what might even happen between now and April 15th. What we do know is that there will still be tax day and that we have the power in our own hands to organize our tax documents from this current year and get ready to face 2021 head-on. This season might not be as jolly or bright as the years past, we understand. However, we are here to make it as holly and jolly as possible. If you have any questions, concerns, or need help finishing out this year or starting off strong in 2021, please never hesitate to reach out. We believe in our community and what to help and support each of you as best we can, let us do our job for you!

What is left of 2020 is still ticking down, so let's hop back into part two of this blog. We will be continuing and wrapping up with our tips, suggestions, and ideas on how to wrap up your finances and taxes this year, and get ready for the upcoming tax season!

HELLO, 2021!
Now that you've read part one of this blog and you have a few ideas on how to prepare for the end of this current year, let's focus on how to prepare for the beginning of this new year. Remember, one of the first things we will always recommend in these situations is to work with a tax advisor or a tax preparation company. Of course, we would recommend working with us, but we understand if you work with another company currently. We've said it before, but please note that tax law does change every year. With how uniquely challenging this year has been, there are bound to be some very new and unique things we will be facing with our 2020 taxes. Working with a company like ours will help ensure that all of these new compliances are followed and that nothing is missed. This will help you avoid any tax penalties, avoid underpaying your taxes, will help avoid overpaying your taxes, and will help get your refund much faster!

Don't begin your filing process until you've received all of your 1099s or W2s. Don't be quiet if a client or your employers are taking their time getting you your tax papers. Make sure to reach out and mention it to them once it's getting a little late in the year. If you haven't received anything by the end of February, it's time to start making phone calls!
When you sit down to file your taxes, make sure you have all of your 2019 tax documents organized and ready to use. Make sure you have all of the documents that you will need and will be used to file for 2020 organized and within reach. This will help the process go faster and will be much less of a headache for you.
Make sure to be prepared for and aware of tax scams and fraud that will begin to pop up starting January 1st!! We've already seen our fair share of scams this year involving our stimulus checks and promising to provide the vaccine early as long as you provide very personal and vital information about yourself, most of the time about your bank account. Please do your research about what scams and frauds are looking like right now, how to spot them, and how to protect yourself from them. Also, if you have loved ones who are unfamiliar with these scams, please make sure you help keep them aware of these possibilities and teach them about what scams are and what they can do.
Decide who's going to prepare your taxes this year as quickly as possible. Decide if it is going to be a tax professional like us here at Hoods or an online option filled out by you. Make the choice now to save money and not miss out on working with a tax pro. The closer you get to tax season, the higher their rates will be. Also, take the time to familiarize yourself with the programs you're going to use and understand how much you will be paying to use them.
Please do not ignore the IRS. If you owe late fees, back taxes, or penalties, please take care of them. Go one step farther and make sure to prepare your taxes on time, if not early, to avoid these issues again.
Make sure your salary is correct, that all of your deductions from your paycheck are correct, and that you've been paid the proper amount throughout the year. This will determine a lot in your taxes.
Consider turning your IRA into a Roth IRA, which will help you save money over time. With a ROTH IRA, withdraws are not looped into your income and you won't have to take out RMPs once you turn 70 and a half.

Just to make sure that we didn't overwhelm you with either part of this blog, we listed only the top things and tasks you need to be thinking about and preparing for now for both your end of the year tax preparation and the tax prep you should be starting 2021 off with. Don't worry, there will be more to come over the next few months and as we inch closer and closer to tax day 2021. We hope that both of these checklists help prepare you to close this year out strongly and to start 2021 out focused and prepared. If you need help to make this upcoming tax season the most stress-free of them all, never hesitate to reach out!

Remember, if you are looking for the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. As our last blog of 2020, we want to thank all of you for your support, your business, and for letting us be apart of this wonderful community. We will continue to work hard for the people of Goose Creek and our whole community. From our family to yours, we hope you had a wonderful holiday and have a fantastic New Year! We will see you soon!

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The Top Ten Best and Worst Things to Spend Your Tax Return On

5/1/2020

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It's tempting to use your tax return to buy something fun and exciting. It's also such a relief when those funds show up in your bank account. But, in a world that is very unsure and uneasy, it might be time to think practically when it comes to your tax return this year!

Hello Goose Creek! How are you? We hope you and your family are doing well, and we hope you know we miss you! Know that through everything we are here for you, and if there is anything we can do to help you, please don't hesitate to reach out to us! It was a much different April than any of us expected or could have imagined. Tax day came and went without much attention. For the first time since 1955, when April 15th officially became tax day, we didn't have to pay our taxes on that day. It was also the first time since 1955 that tax day was moved, this time to July 15th. It was very strange for us, of course. But, we know that for many families in Goose Creek, this might have been a huge relief! Did this help you and your family? If you still haven't paid your taxes, you do have time to do so. But, we do recommend that you do so as quickly as you can. This way you can receive your tax return quicker and possibly your stimulus check too if you haven't already!

Regardless, for every accounting service in Goose Creek and tax preparation in Goose Creek, this was a very strange April. Thankfully there are still plenty of great things to look forward to on the horizon. One of those great things being the appearance of our tax returns in our bank accounts or mailboxes. For many families, the appearance of this money comes with a lot of relief, bills being paid, and sometimes something very fun for the whole family. But, as we mentioned before, this April and the whole of 2020 has created quite a different dynamic for our everyday lives. As much as we love surprising the family with a new TV, A new car, or a family vacation, now might be the time to look at your tax return in ways you never have before. Being the best tax preparation service in Goose Creek, we wanted to share some of the best and worst ways you can spend your tax return. By doing so, we hope to help bring awareness to what is important right now, and what isn't. Please note, we are a family company. We love our town and want each of you to rise to the best of your abilities. We respect the freedom of your decisions but want to help you through these difficult times as best we can.

WHAT NOT TO SPEND YOUR RETURN ON!

The stock market has been tumultuous these past few months. Some view this as a great sign, while others are avoiding it like the plague. The market as a whole has been in a very unique and interesting flux. Some are calling this a buyers market and pressing people to buy now. Your tax return might be burning a hole in your pocket right now while you're sitting at home, but your tax return is not what you should be using to make a quick and hasty investment. Always make sure you research the investments you want to make and how to properly do so. Making a poor investment can lead to losing your whole tax return, and then some.
The decision to not spend your tax return and just let it sit in your bank account might seem like a wise decision right now. But let us convince you otherwise. Just letting it sit there can tempt you to spend it on all kinds of fun or unneeded items, helping it disappear before you know it. Delegate where your tax return is the most useful to your budget and your needs right now. Put some in your savings, get ahead on your bills, bulk up your emergency fund, and plan out your grocery trips based on this money. This way you're using your refund where you need it right now, and don't wind up in an even more difficult position than before.
One of the most obvious things not to spend your return on right now, and one that we've been hinting at, is a big splurge or big-ticket item. Think about it, most of these items or trips can't be enjoyed or used right now. A new car, unless it is needed, can add on a very expensive insurance policy you can't afford right now. Also, tax returns, just like a normal paycheck, don't last forever. As much as differing bills and payments have been helping right now, those bills aren't going away forever. Neither are your grocery bills, utilities, expenses, and gas expenses. A splurge can be very exciting for a short period, but it doesn't last forever.
We are online more and more every day for work, school, and play. Some of us are looking for a way to supplement lost income, get a new job, or ease our boredom. The world might have shut down, but there are still so many get rich quick scams out there waiting to pounce on you and your tax return, promising to double your money overnight. If it sounds too good to be true, it is. Avoid buying into these companies regularly, but avoid them now even more in particular.
Expanding on the idea of those 'get rich quick' ideas, avoid gambling online or other pay to play games online. It might be a fun and exciting thing to do while we're all at home, but it's just as easy to lose it all from the comfort of your living room as it would be in Las Vegas. Also, avoid spending your return on scratch-off lotto tickets and the state lottery in general.

WHAT TO SPEND YOUR RETURN ON!

Buy groceries and other essential items. Hoarding these items is not helpful or necessary right now. But, buying a larger quantity of groceries and important household items than you normally would can help limit the number of trips you're making outside of your home. This can help keep you and your family members healthier and safer.
Catch up on your bills and try and pay ahead. Like we mentioned above, these funds won't last forever, while your bills will. Help yourself by getting ahead as much as you can, and stay prepared.
Like we have mentioned in our past few blogs, keeping up with paying into your retirement fund and leaving it alone right now is very important. If you haven't been able to do so because of the change in your financial situation, take the opportunity to do so now!
Everything is so unknown right now, the job market is very unsteady, and hurricane season is right around the corner. Using this money to bulk up your emergency fund can help you make it through these unknown times now, and once hurricane season shows it's ugly face.
Now is a great time to invest in yourself and your home. Thanks to online education, you can still sign up to finally finish your degree or start the new degree you've been dreaming of. We also offer Quickbooks training and services, which is a great investment for your personal and small business finances. Thanks to online shopping, you can still order those appliances you've been needing to replace or those materials you need to finish up all of your home makeover projects. It is also the perfect time to support local companies! Hire small companies to do all those repairs you've wanted that are just beyond your skill sets. Support local businesses of all kinds if you can, you're investing in your community and helping it stay strong and united.

Money can be a difficult and tricky topic, but it doesn't have to be. We hope these tips help you and your family through this difficult time. Remember if you are looking for the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!

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Hoods Tax &
Accounting Blog

End of the Year Tax Preparation (Part Two!)

The Top Ten Best and Worst Things to Spend Your Tax Return On

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​Hoods Tax & Accounting Blog

End of the Year Tax Preparation (Part Two!)

The Top Ten Best and Worst Things to Spend Your Tax Return On

Author

Archives

Categories

Hoods Tax &
Accounting Blog