I know we all hate the idea of clipping coupons to save money, but they can actually help a lot as long as you know which ones are worth clipping. Do not bother clipping coupons you are not likely to use or those that have expiration dates that are sooner than you will be going back to the store. If you have the time and the energy, you can even double your savings with coupons if you keep track of when your store is going to have the items that you have coupons for on sale. Try not to use your coupons unless the item is on sale to get the maximum savings, but when you use them is up to you.
Cut out the cigarettes. We all know that cigarette smoke is bad for us and the people around us, but think about just how much money you spend every month on the habit. Sheesh! A pack of cigarettes costs on average around $4.50, including the taxes. If you smoke a pack a day, then you will spend around $30 per week or close to $1,600 per year! That is a lot of money that you are basically rolling up and setting on fire each year. Not only that, but if you smoke while driving or even inside your own home, you are ruining its interior. Selling either your vehicle or home later will cost you extra in cleaning fees. Do your budget a favor and kick the habit.
Do yourself a favor and leave the kids at home when you go grocery shopping. Kids are pretty persuasive, especially when they are misbehaving in the store, so they may try to get you to buy them things in exchange for being quiet. If you have to, make a list of things the kids want before you go so they will get what they want without having to argue with you over it in the store. Let each child pick one item and if they can't think of anything they want before you leave, then there is nothing they need.
Create a grocery budget every month. Go back and look at what you have spent on groceries the past 3 months and see how much you have spent on average. Determine how much you want to shave off that bill and shoot for it. The only way to know how much you are saving is to know how much you were spending before.
So what are the chances of being audited? Audit chances are increased when deducting home office expenses, charitable contributions, small business mileage claims, entertainment expenses, and certain medical costs. So especially if you make these types of deductions or if you missed paying your taxes at some point, be sure to have the right papers on hand.
The important point to remember is that during an audit, the IRS will want to see records of income and deductions.
Thus, tax information that you should hold on to includes:
-Tax returns In addition to saving tax returns for audit purposes, tax returns can be useful for help with filing taxes in the current year such as in looking at deductions you have taken in the past that you might have otherwise forgotten to take.
-Home expenses Be sure to keep all records having to do with your home including settlement papers and receipts for home improvement work that can explain the worth of your home because single filers can receive a $250,000 tax-free capital gain and married filers can receive a $500,000 tax-free capital gain on their sale of their home. However, this tax-free capital gain can only be realized if the profit of the sale falls within the tax-free limits. The tax-basis (value of the home when purchased) needs to be verified.
-Business records
-W-2s, 1099s, bank statements, brokerage statements, as well as evidence for expenses such as receipts, checks, and mileage records.
-Records of securities like stocks, bonds, options, and mutual funds. Don't throw away these records until 3 years after you sell the securities.
-Deductions such as childcare expenses, education expenses, travel costs, and automobile costs. Form 8275 is a Disclosure Statement you can file with your taxes to explain deductions to reduce chances of an audit.
-Mortgage interest you have paid (Form 1098)
How long should you hold onto these papers? The IRS has a statute of limitations that is 3 years from when you file your return. Thus, if you don't file your taxes, the statute of limitations doesn't begin. Also, you want to try to keep tax information for 6 years because if the IRS believes you underreported your income by more than 25%, they can audit you up to 6 years after you have filed the return.
Not having the right records when undergoing an audit can turn into a nightmare. Though the chances of being audited are not high, anyone can be chosen for an audit. Be prepared and the process can run quite smoothly.
Both Dror Klar & Becky Schmitz are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Dror Klar has sinced written about articles on various topics from Satellite, The Internet and Finances. Dror Klar is a writer in the field of finances and is currently assisting those in need of , particularly in the state of. Dror Klar's top article generates over 3350000 views. to your Favourites.
Becky Schmitz has sinced written about articles on various topics from Personal Finance. Becky Schmitz is Montana's only Certified Tax Resolution Specialist. Her firm, helps people nationwide fix their tax problems by offering ser. Becky Schmitz's top article generates over 480 views. to your Favourites.