It’s that time, my friends.Â It’s time to start working on my taxes.Â I usually run the numbers through a couple of different online tax sites, and then file with which ever site charges the least to file.Â This also gives me a chance to spot any errors or inconsistencies.
This will be the second year in a row where I have had to pay taxes on business income.Â I’ll figure my taxes, as they stand today, and if there’s an opportunity to reduce them by contributing to my SEP-IRA, I shall do so.Â Last year, I made a contribution to my SEP-IRA which significantly reduced my tax liability.
Our third child was born last April, so this year I’ll be able to claim another dependent.Â This, too, should decrease our tax liability.
I’ll start inputting data this evening.Â If it looks like I mÂ due a refund, which I doubt, I’ll go ahead and file.Â If it looks like I am going to have to pay additional taxes, I’ll wait a few more weeks, and then I’ll file.Â There’s no need for me to send Uncle Sam anymore money until I have to.Â I might as well let it sit in our savings account for a couple of more weeks, earning a few more pennies in interest.
5 thoughts on “Time To Start Working On My Taxes”
It’s worth noting that you don’t have to pay when you file, and you can pay on April 15 even if you go ahead and file now. I am not sure if the online services will let you pay later now, but several years ago, TurboTax for the Web had a check box to delay the tax payment until April 15. If so, that’s just one more way to make sure natural disaster or family emergencies can’t leave you paying a penalty because you filed late.
Just something to check into.
Matthew S, Cool, I’ll look into that…
Dependents don’t decrease the tax liability on self-employment income, do they? I did a preliminary run through on our taxes and we owe (despite all the child related credits), so I’ll get back to them when I’ve located more business receipts 🙂
Lisa… We have both self-employment income and income from our employers. An additional child will mean an additional child tax credit and we can deduct child care expenses.
You sould receive an extra $300 for having another child. Make sure you get that Recovery Rebate Credit! Most software programs ask you about it during the process.
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