Balance Your Budget To Be Prepared For Tax Season

Written By Louis Tully

Published on October 13, 2023

The process of filing taxes is definitely stressful, but you might be able to avoid unnecessary complications if you start to balance your budget way before the tax season. Though the due date for filing the tax return typically falls in the middle of April, it’s never too early to start putting a system in place to make the process easier.

Do you even need to adjust your budget, if you’re planning on getting a tax refund? And what is the best way to save money on your taxes? Let’s dive deeper into the topic.

Should You Balance Your Budget In Preparation For Tax Season?

Most Americans do indeed get a refund from the IRS after filing their tax returns, but about a quarter of all filers actually end up owing the Internal Revenue Service money.

The image depicts a person dropping a coin into a "budget" jar, emphasizing the importance of balancing your budget for tax season preparation.

This can happen if you:

Selected the incorrect withholding amount
Weren’t setting aside enough money from a gig job or a side hustle
Weren’t making estimated tax payments throughout the calendar year
Didn’t know that unemployment income was taxable

By the way, even if you are eligible for a refund, you would have to make sure that all your documents are prepared correctly in order to actually receive that sum. So, you might have to spend anywhere between $200 and $900 on the services of a professional tax preparer.

How To Prepare For Tax Season

In a nutshell, the earlier you start preparing for the challenging period, the better.

Here are a few things that you can do.

1. Establish A Record-Keeping System

All of your records have to be kept in one place and organized by date. Even if you’re getting your income from different sources, you would have to find a way to get them together.

You can use spreadsheets or accounting software to track every single transaction. Thanks to such bookkeeping methods, you will be able to generate monthly and annual financial reports whenever you need them.

2. Max Out Tax-Advantaged Accounts

You might want to consider maxing out some of your accounts to reduce your taxable income. For example, you can choose to contribute to an individual retirement account (typically, up to $6,000) or a health savings account (up to $3,650 for single coverage).

Such a strategy will help you reduce your taxable income for the next year, and it’s a great way to continue building your nest egg.

3. Balance Budget

If you know that your record-keeping system is not perfect, that you weren’t making your estimated tax payments, or that you would have to splurge on a tax preparer in April, then the best way to get prepared for the tax season is to start setting aside a portion of your income as soon as possible.

You would generally have to save 30-35% of what you earn to cover both federal and state taxes. If you’re not self-employed, setting aside about 10-15% of your income is generally recommended, so that you’re prepared for the unexpected payments associated with tax season.

A smiling man holds cash in the image, indicating budgeting and financial management for short-term loans in Nevada.

When To Take Out A Loan?

Though all the tips mentioned above sound like a great plan, in reality, only a small percentage of people would actually be able to follow them.

If you’re one of the individuals who found out that they owe the IRS after filing taxes or if you don’t have enough money set aside to pay your tax preparer, then going for a title or a payday loan might be worth it.

How Can Nevada Title And Payday Loans, Inc. Help?

With Nevada Title and Payday Loans, Inc., you might be able to qualify for a considerable amount of money in only 30 minutes. The lender offers competitive loans and has convenient store locations set up across Nevada.

You might get approved for up to $15,000 in case you decide to opt for a title loan, and for up to $500, if you’d prefer to take out a payday loan.

The reputable lender is committed to providing you with the best customer service possible. Furthermore, the friendly representatives will try to do everything they can to make sure that you get the much-needed cash in the shortest timeframe and without any additional stress.

Apply For Urgent Cash Today!

When preparing for the tax season, you would have to balance budget, master a record-keeping system, and, ideally, max out any tax-advantaged accounts. Of course, not everyone would have enough time to do that, and if this season brought you quite a few unpleasant surprises (like unexpected payments, for example), then you might want to consider taking out a loan.

Nevada Title and Payday Loans, Inc. offers fast and convenient title and payday loans and welcomes all credit. And the best part is that you might get approved for the loan in as little as 30 minutes. To get started right now, simply fill out an online request form.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.