Tax season can be stressful, especially for small business owners and individuals who manage their own finances. The good news? There are several tax shortcuts that can save you time, effort, and even money. By simplifying your approach to tax preparation, you can file more efficiently while ensuring you maximize your deductions. Here are great tax shortcuts to make the process easier.
1. Take the Standard Deduction
Instead of itemizing deductions, which requires tracking and calculating a variety of expenses (like medical bills, mortgage interest, and charitable donations), you can take the standard deduction. The standard deduction is a flat amount the IRS allows you to deduct from your taxable income—no need to gather receipts or track every dollar. For many people, the standard deduction offers significant savings without the extra work.
2. Set Up Direct Deposit for Faster Refunds
If you’re expecting a tax refund, setting up direct deposit can significantly reduce the time you’ll wait to receive your money. When you file your return, simply provide your bank account information, and the IRS will deposit your refund directly into your account, often in less than 21 days.
Direct deposit is faster and more secure than waiting for a check in the mail, and most tax software will prompt you to set this up as part of the e-filing process.
3. Use the IRS Mileage Rate for Business Deductions
Tracking every business-related car expense—like gas, repairs, and insurance—can be time-consuming. Instead, take advantage of the IRS standard mileage rate for business use of your vehicle.
Simply keep a log of your business mileage, multiply it by the standard rate, and you can deduct that amount from your taxable income. It’s a simple and straightforward shortcut that can save you both time and paperwork.
4. Leverage Tax Extensions When Needed
If you're running short on time to gather all your financial documents, filing for a tax extension is a smart move. While this doesn’t extend the time you have to pay your taxes, it gives you extra breathing room to finalize your return and avoid the rush.
Remember, paying what you owe by the original deadline is crucial to avoid penalties, but the extension can help you avoid mistakes or missing out on key deductions due to rushing.
Tax preparation doesn’t have to be overwhelming. By using automation tools, opting for the standard deduction, and simplifying how you track expenses, you can cut down the time and effort needed to file your taxes. Don’t forget to use shortcuts like direct deposit for faster refunds and extensions when needed to reduce stress. These simple strategies can help you streamline your tax process and focus more on the important parts of your financial planning.