Remember paying taxes for the very first time? You probably had a whole lot of questions, and maybe you didn’t do things quite right. We asked a panel of professionals to talk about what experience has taught them about taxes. Read on to learn what they had to say. Whether you’re relatively new to the game or a seasoned tax payer, you might discover some helpful advice.
Aaron Simmons is the founder of Test Prep Genie. He believes in studying smart rather than studying hard to be successful. On this blog, Aaron shares tips and tricks on how to develop smarter study habits.
Don’t Be Afraid to Get Some Help
If I could give my younger self a piece of tax advice, it would be to be brave and don’t be ashamed to ask for some help. When you grow up, there are a lot of things that you need to attend to, address, and fix. That includes tax, and it can be challenging to juggle all of them at once. However, don’t be ashamed if you need some help. You could hire a tax professional to fix things for you. This is not an act of being immature, it is an act of helping yourself. Don’t worry about spending a little if it could help you be at peace.
Bottom line: Tax professionals won’t just do your tax management for you; they are a huge help to unload some of your tax burdens
Brady Kirkpatrick, Founder of Gun Made.
Speak with a CPA/accountant
My biggest tax advice I would offer my younger self is the following:
“The money you make from your first business is not what you take home.” Seems pretty obvious, but a lot of people make this mistake in their first year as a business owner.
I’d tell my younger self to speak with a CPA/accountant as soon as I started making decent money in my business. It will save you from an unexpected tax bill from Uncle Sam.
Jonathan Sanchez, real estate investor and co-founder of ParentPortfolio. Jonathan owns a couple of properties in his local market and has been featured on Business Insider and USA Today.
About 10 years ago, I was not able to sell my house due to the conditions of the housing market at that time. Therefore, I decided to rent out my house without having any idea of how to be a landlord. I dreaded it at the time.
Now, as an experienced real estate investor, I wish I would’ve done things differently. I would advise my younger self to take advantage of the tax deductions as a landlord. For example, repairs and mortgage payments are tax-deductible.
Furthermore, I would tell my younger self to perform a 1031 exchange. This tax code would allow me to sell my house and defer paying taxes on the capital gains. The requirement is I just need to purchase a “liked” investment property.
Shannah Henderson is the President and Founder of Henderson Public Relations. Based in Minneapolis, Henderson Public Relations secures invaluable media coverage and so much more for their clients to get their brands seen and messages heard.
Write down and organize
My tax advice to my younger self would be to always take the time to write down and organize all of my business expenses into a spreadsheet the day they take place. The same goes for always recording the miles I drive for my business each day.
Many tax seasons, I would wait until the last minute to try to remember and add my business expenses and miles to spreadsheets, and I likely missed a lot of them. Recording everything from the start of each tax year would have made the process a lot easier and more organized.
Imani Francies writes and researches for the insurance comparison site, USInsuranceAgents.com. She earned a Bachelor of Arts in Film and Media and specializes in various forms of media marketing.
Start Conversations About Money with Parents
My parents are so worried about protecting my siblings and I from “real-world” problems that they forget children absorb information like a sponge. Though they thought they were sheltering us from money issues, we sensed things were wrong at times. Now as an adult, I understand that children can handle the basis of what would usually be considered an ‘adult conversation,’ and that having these conversations promotes financial literacy for kids and teens.
Open a College Savings Plan
I would have advised myself to open a 529-plan earlier. This is a college savings plan that offers tax and financial aid benefits. These plans are usually backed by the state, which provides more comfort for those who worry about losing their money.
While in high school I made at least 20 thousand dollars over the course of working my junior and senior year in high school. If I had saved that money or invested it, I would have come out of college debt-free.
The [College Savings Plan] offers unsurpassed income tax breaks from the federal government and even the state. It is also a low maintenance savings plan, and the tax reporting is simple compared to other programs.
Ben Walker is the CEO of Transcription Outsourcing, LLC a transcription service that works with government agencies, single practice attorneys, and physicians, as well as entire university systems to provide fast, accurate, and reliable transcription services.
Set aside money for taxes
Like death, taxes are the one constant thing in life. You simply can’t escape them. That’s one thing I learned the hard way as a young adult, particularly when I was starting out in my first job. For my first few paychecks, I spent them all on unnecessary things. Before I knew it, I was borrowing money because I forgot to set aside money for taxes, retirement, and my 401(k).
Safe to say, it helped me be smarter with my money. It’s a tough lesson learned, but I’m glad it happened to me as a younger individual.
Laura Fuentes’ love for every major sport made her aware of the frustration that comes with trying to acquire a decent cable sports package. In turn, she became a major advocate for Dish and began operating Infinity Dish.
Hold on to receipts
As a business owner, I have learned the value and need to hold on to all receipts, but when I was younger, I was careless and did not understand how helpful they could be in my personal life. I make a lot of small donations during the year and never held onto those receipts. I did the same with my medical receipts. I didn’t realize the benefits those can provide when [you are] filing your taxes.
I now have several file folders for various personal expense categories. I have my experience in becoming a business owner to thank for the knowledge of how vital receipts are.
James Walsh, Entrepreneur / Financial Advisor / Podcast Host and a CEO at billionsinthebank.com
Don’t invest to save but to create a financial setup
Don’t be a youngster who invests to save taxes but has an aim or a purpose in life to have a secure future after retirement. Think a lot before you make any commitment regarding investment for saving taxes.
Investment without research can harm you financially.
Ethan Taub founded Loanry, Inc with the mission to create one place to reach financial goals and comparison shop for any money matter.
Different country, different tax rates
Learn more about different types of tax and how to legally avoid it. Many think that avoiding taxes is a type of greed; however, there are many legal ways around paying taxes if you know what you are doing, especially when it comes to owning a business abroad. As different countries have different tax rates, it’s useful to know where you can find the lowest tax bands and make the most out of money that you have earned yourself.
Achintya Kolipakkam, Designation Content Marketer at mybestluxe.com.
The best thing in the world is to invest. You will not only get multiple tax benefits but also earn a lot of extra money. It is not a very tough job to become a millionaire by 50 if you [set yourself up for] systematic savings and invest in SIPS [systematic investment plans], government securities, and health savings accounts.
Start different businesses, invest in startups, and help other businesses boom, too.
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