How to make the most out of your tax returns
The period of doing your taxes can be quite stressful. It can be overwhelming and confusing, and it’s not fun. However, it is something that must be done.
Paying your taxes is a legal obligation, and besides that, if you do your tax returns properly and correctly, you may even get some of your money back.
Taxes don’t need to be a negative thing. In fact, there are various ways to make the most out of your tax returns, which means you’ll be the one benefitting.
Get a UTR
A UTR is your unique taxpayer reference. Without it, you will be unable to pay taxes. It is a ten-digit number that every taxpayer in the UK needs. A UTR will allow you to file a self assessment tax return, which can be done either via post or online. While many forms of income are automatically taxed, some of them aren’t. Self assessment tax returns are a way for tax to be collected from those forms of income that aren’t automatically taxed. If you don’t have one, you should apply for a UTR number.
See if you qualify for a tax rebate
A tax rebate refers to a situation where a taxpayer has paid too much tax, and some of that tax money is returned to them. Possible reasons for claiming tax rebates can be old age or using your own personal transport to travel on behalf of your employer. Anyone who thinks that they could possibly have a valid claim for a tax rebate should put their claims in as soon as possible.
Claim all possible deductions
Tax reductions lower your taxable income, and therefore you will be liable to pay less tax overall. Usually, when you do your annual taxes, you will include all your expenses so that you can be taxed on them. However, you can claim deductions on some expenses, meaning you won’t actually be taxed on them. Certain medical expenses will be deducted, as well as certain charitable donations. For a more comprehensive list of items that are possibly deductible, click here.
Be precise
Don’t do your tax returns if you’re rushed. It’s a very important task that will require a lot of concentration, so be sure to do it when you can dedicate a good portion of time to it. When you do your tax returns, you want to make sure that you do everything correctly. Be sure to double check everything as you do through it, and do a few run throughs at the end to spot any mistakes. It might mean some extra work for you, but remember that it could lead to benefits such as getting money back. If you’re unsure where to start, try following this step-by-step guide to doing your taxes.
Hire a professional
If you don’t have the time, or you’re struggling with your taxes, it might be time to hire someone to them for you. While this isn’t as cheap as doing your own taxes, it’s much more convenient and will probably be done better than if you did it yourself. If you’re still on the fence, here are some more reasons to hire someone to do your taxes.
