If you’re unsure of how to go about filing your taxes on an annual basis, Barry Bulakites believes to discover a handy step by step guide to managing your taxes in the USA.
How to manage your taxes in the USA:
Consider investing in DIY tax software
If you don’t want to spend a small fortune on hiring the services of a registered accountant, you may want to consider purchasing and downloading DIY tax software, which will significantly cut down on the time, which you’ll spend calculating your tax obligations.
If you’re interested, there are a wide array of programs which you can choose to download, which will help you automate the process of managing your taxes. As an example, if you work as a contractor, it’s well worth opting for a tax program which is aimed at helping contractors manage their taxes. As while most employers will automatically send their employees tax to the government, if you’re a contractor and work for yourself,
Figure out which tax bracket you fall into
Depending on how much income you earn on a yearly basis, you’ll be placed into a different tax bracket. Generally speaking the higher the amount of income which you earn, the higher tax bracket you’ll be classified under and the higher rate of tax you’ll be expected to pay.
Currently, the top tax bracket in the USA applies to individuals who earn over half a million dollars in a single fiscal year. Individuals who are placed into this tax bracket are made to pay 39.6% of their income in tax to the government.
If you work as a private contractor, make sure that you put money aside to fulfill your annual tax obligations
If you’ve chosen to work as a private contractor or run your own business, you won’t have an opportunity to pay your taxes until the end of each financial year. Which means that you’ll need to figure out your projected tax obligations ahead of time so that you have enough money put aside to pay your taxes. Which often will be tens of thousands of dollars.
Unfortunately, many contractors find themselves in hot water when they spend a large proportion of their income during the year and don’t have enough money left saved in order to pay their annual taxes.
If in doubt talk to an accountant
If you still are unsure of how to go about managing your annual tax returns, your best option may be to hand over the responsibility of filing your taxes to an experienced accountant. Who’ll be able to ensure that your taxes are filed to code and that you won’t get into trouble for failing to pay your taxes on time. As there is a date each year, by which you’re legally obligated to file your taxes by!
If you think you can manage to file your tax returns on your own it’s well worth downloading a DIY tax program, to lead you through the process of filing your taxes. However, if you’re confused by the process of managing your taxes in the US, you may want to consider hiring an accountant!