It's Not Fun, but It Has to be Done Benjamin Franklin wrote a 1789 letter that states, “But in this world nothing can be said to be certain, except death and taxes.” Even at the United States’ early beginnings, federal taxes were a necessary evil to fund various public projects and administrative costs. Today, federal taxes serve much of the same purpose. While virtually no one likes to prepare and file their taxes, it is a necessity if you want to avoid fines and further hassle. It is no secret that preparing and filing your taxes is notoriously complicated. Many people lament that it should not be so difficult to pay the government. However, some of the complications allow people to save money if they discover specific tax benefits. Knowing how to file your own taxes may be a good option if your tax situation is relatively straightforward, or if you are willing to learn the process. Why Do You Need to File Your Taxes Every Year? The short answer is that federal law requires that most individuals file taxes annually. Income taxes are assessed every year based on your income earned during that period. You then pay a percentage of that income to the government, less any deductions, adjustments, or credits that you qualify to receive. If you do not file (and pay) your taxes, then you may be assessed penalties and interest. The Internal Revenue Service (IRS) can even go as far as garnishing your wages and repossessing your property if you do not file and pay as required. The Benefits of Filing Your Own Taxes If you are one of the 43% of Americans that are doing your own taxes, you are certainly not alone. Roughly 53 million people prepared and filed their own taxes in 2018. There are many benefits to filing your own taxes, including: Saving money: Hiring a tax professional is expensive, and many people can prepare and file their returns on their own, completely free of charge. Control: Some people like knowing the exact information that is included in their return and being able to control the data, and for some, knowing precisely how the numbers work out, is comforting. Gain helpful information: When you prepare your taxes, you can see what items saved you money this year or which issues you should address so you can save money next year. While filing your own taxes is complicated, it can be beneficial under the right circumstances. There are several programs online that walk you through the process to help ensure you are taking advantage of all of your available deductions and credits. The Drawbacks of Filing Your Own Taxes In addition to the benefits, there are also some disadvantages to filing your own taxes. These include: Time and effort: Preparing and filing your taxes takes time and work You have to sift through financial information and deal with concepts that you may not understand well. The process can be frustrating and take a considerable amount of time. Error risk: If you do not completely understand how your taxes work, you run the risk of making a mistake because of misconceptions. If that happens, it could lead to underpayment and audits down the road. Questions: Even if you use a tax preparation software, you may still have questions that will remain unanswered unless you do significant research or reach out to a tax professional. For some people, the risk of having a substantial error that triggers the IRS’s attention is enough to scare them away from preparing their own taxes. Preparing for Filing Your Taxes When you begin work on your taxes, you should have information gathered throughout the year. Some of the most common items that you will need include: Social Security numbers for you, your spouse, and any dependents Information about wages, such as W2s or 1099s Investment income information Documents that represent any other source of income Information regarding adjustments to income, such as student loan interest paid, IRA contributions, and health savings account contributions, just to name a few Information regarding potential credits, including, for example, child care expenses, education expenses, or retirement savings contributions Data about any tax payments that you may have made throughout the year Keeping good records will help make tax preparation easier at the beginning of the year. [youmaylike] The Basics About What You Can Claim When Filing You must pay income taxes on all your income earned throughout the year. However, that income is reduced by a few things. The further you can reduce your taxable income, the less you tax you will pay. There are three general categories of tax reduction methods: Standard or Itemized Deductions Everyone can claim either the standard or itemized deductions. Standard deductions are a set amount that is based on your filing status. Itemized deductions are based on actual expenses that you incurred throughout the year. You can choose to use the higher deduction. The higher the deduction, the less tax you will have to pay on your income because your income decreases on paper. Itemized deductions include things like medical expenses, state and local tax payments, and home mortgage interest deductions. Itemized deductions will only decrease your income by a certain percentage, or up to a specific point. Adjustments Some adjustments to your income may also be available. These include things like paying student loan interest or alimony. Adjustments are more valuable compared to deductions because they decrease your income dollar for dollar. Credits A credit decreases your taxable income as well. Some credits are refundable while others are not. For example, you get a child tax credit simply for having children that qualify for that credit, but that credit will not be paid out to you if you do not have any tax obligations. On the other hand, the Earned Income Credit, which is available for low-income filers, will be refunded to you even if you do not owe any taxes. There are a wide variety of deductions and credits available. Take a look at the federal forms and related schedules to determine whether you might qualify for any of these. How to File Your Own Taxes If You Live Overseas If you earned income in the United States as a U.S. citizen or resident alien, you likely need to pay taxes on that income. This is true even if you live overseas. You can still choose to e-file or mail your tax return to the IRS once you have it prepared, just as if you physically lived in the United States. In some cases, you will be taxed on the income that you earned throughout the world. However, you may be able to deduct a portion or all of the revenue that was not made in the United States in some circumstances. Filing Online The IRS offers an online filing option that is free for individuals that have an adjusted gross income below a specific threshold. Generally, your income must be below $66,000 to qualify for this service. You can also file online by using a commercial tax preparation software. Examples of this type of software include: H&R Block TurboTax TaxCut TaxSlayer There are many programs available that will file your taxes for you, often for a fee. Knowing how to file your own taxes can be a great way to save money, but it can be tricky as well. If you want to file your taxes yourself, be sure to read the form instructions thoroughly and get familiar with various tax saving opportunities before you begin preparing your return.
Understanding the Real Estate Market
The number of new listings for houses and condos is 17.2% below the five-year average, making it increasingly challenging for first-time buyers and those looking to climb the property ladder to find a home in Ontario, Canada. Fortunately, we’re on hand to identify the best and most affordable places to live in the region - helping you on your way to finding a new home you love.
Read on to discover five great Ontario cities offering the chance to buy real estate: London, Deep River, Windsor, Thunder Bay and Sarnia. Let’s start by exploring the property market in Windsor and discover why it’s such a great place to live.
1. Thunder Bay
The city of Thunder Bay is a great choice in the real estate market, located on the edge of the world’s largest freshwater lake - Lake Superior. It’s an incredibly affordable option in the house-buying market and promises an exciting life for anyone lucky enough to secure a property here.
Kakabeka Falls is a gorgeous waterfall in the city that offers great walks after work, while Mount McKay Lookout provides unique views of the mountain range. And that’s not all - the International Friendship Gardens offer a great spot for catching up with friends and family. There are dozens more attractions you’ll love in this lively city.
2. Windsor
Houses and condos in the bustling city of Toronto are now so expensive that many people have been locked out of even entertaining the idea of buying a home there. Thankfully, Windsor offers a great alternative.
It’s a large city at the southern tip of Ontario. It’s the most southern city in Canada and offers affordable housing for single-income buyers and couples pooling their money. Houses in Windsor are around $175,000 below the average property price for Canada, making homes here a worthwhile investment in today’s turbulent housing market.
The city is known for its late-night clubbing scene and cultural landmarks such as galleries and museums. There’s also a water park, which is great for families, and the Windsor International Film Festival - which welcomes 20,000 people each year and showcases dozens of amazing movies.
One of Windsor’s best advantages is that it’s easy to commute to Detroit. It takes as little as five minutes across the Detroit River, offering homeowners more entertainment options alongside ample job opportunities. For those not wanting to leave Windsor for work, there are lots of jobs in the automotive sector. Windsor isn’t known as the Automotive Capital of Canada for nothing.
3. Deep River
The size of a city can hugely impact the cost of buying a condo or house. The rule tends to be - the larger the city, the higher the price. Because of this, smaller cities in Canada are becoming increasingly popular and few are better than Deep River in Renfrew County.
Located on the river, life in Deep River is guaranteed to bring you peace and tranquillity. There are only 4,000 people who live here, meaning it’s never too crowded in the picturesque landscapes that dominate this area.
Deep River is a great city for buying a home because, not only are house and condo prices low, but wages are higher here than in many other parts of the country.
4. Sarnia
Another affordable city in Ontario is the lake-side community of Sarnia. 70,000 people strong, this city offers cheaper properties to buy than other locations of a similar size.
There are lots of schools here for parents of young children or those wanting to start a family, as well as public transport for moving within and out of the city. There are one hundred parks to explore, alongside a museum containing six thousand exhibits and multiple beaches for sailing adventures.
Sarnia also has a low unemployment rate, suggesting that many great jobs are available in the city if you decide to move there.
5. London
Sharing its name with England’s capital city, London in Ontario even has a River Thames. It’s a large city with over 420,000 inhabitants and plenty to do and see.
London is an ideal location for buying your first or next home. There’s a picturesque university campus and multiple colleges, elementary schools and secondary schools. There’s also an airport and rail services, making it easy to travel further afield. Hockey and baseball are essential to this city, with regular games that you can attend.
This amazing city is slightly more expensive than Windsor, but not substantially. Plus, it’s still dramatically cheaper than Toronto. House prices here are rising year-on-year, but this is happening at a much slower rate when compared with other locations in Ontario.