Jenna, the best tax move I ever made was learning to prepare my own tax returns. I started in my late teens, learning the hard way---by simply doing it while poring through IRS publications. Reading and interpreting IRS publications is an art in itself!
A few years later, I took a tax preparation course provided by H&R Block. For several years, I even worked part-time as a tax preparer. I remember wanting to help our clients plan better and take advantage of the Code, but I got scolded by my boss for doing it. He said something like, 'we don't have the time and aren't paid enough to give tax advice.' That was one of those lightbulb moments for me. The lesson is that nobody, but NOBODY, is going to look after your financial wellbeing as much as YOU can. That reinforced my lifelong practice of do-it-yourself financial management.
Doing my own taxes helps me know what records to keep and how to keep them as I go through the tax year. When springtime rolls around, I have all the information compiled and ready to quickly prepare my returns.
Preparing my own returns also keeps me focused on those things I can do to minimize my tax bill. I do my best to keep my ordinary income below my deductions, so that the only taxed income will be from qualified dividends and long-term capital gains, which for me are taxed at a maximum rate of 15%.
A quick internet search can provide a host of online tax-prep courses. Investing the time and expense in taking such a course can pay huge dividends.
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Rob Adams
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