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5 Ways to De-Stress During Tax Filing Season

By U.S. News & World Report

Does the thought of taxes send you into convulsions? You aren’t alone. An American Psychological Association survey shows that 67 percent of people attribute their stress to money. And tax time shines a big spotlight on your financial picture.

There are ways to make tax time easier and less stressful, so you can focus on earning more money and spending free time on fun, not on figuring out your tax bill.

[See: Answers to 7 Burning Tax Questions.]

1. Organize from the beginning. Collect tax-related documents in a basket the second they come in the door. By having all of your information in one-easy-to-find location, you eliminate the stress of wondering where that important sheet is that you misfiled.

Invest in a good scanner. Random papers strewn all over your home office is stressful. Clean up the paper trail by moving all of your documents into a file folder on your computer. You can then store the paper copies away and have the flexibility to send necessary documents at the push of a button whenever you need them.

Many professionals and tax programs have tax organizers that they’re happy to send your way. They are a checklist of all of the documents you’ll need in front of you when you’re ready to begin your taxes. Working through this document gives you the peace of mind that you’ve collected everything and left no stone unturned.

[See: 10 Smart Ways to Spend Your Tax Refund.]

2. Start your prep early. Want stress? Deadlines create stress, and so does finding out at the last minute that you’re missing an important document. Instead, try this trick. Give yourself a time limit to work on your taxes each week. Don’t set out to finish the task — instead only try and start it. Productivity experts agree that this approach will allow you to cut through procrastination and get prepared for tax day well ahead of the deadline.

3. Read a tax form. Many people think of taxes as “magic” and wonder if there are any loopholes or exemptions they can take advantage of. There’s good news: Most of the clues around a lower tax bill are mentioned right on the actual form. That’s right. If you read three pages (the front and back of a 1040 and the itemized deductions page), many of the tax secrets of the universe will open up to you.

On a 1040, you’ll quickly see that it’s simply laid out. At the top, you input your income. And in this section, you’ll see all of the government’s clues to reduce that number. IRA deductions, nontaxable pensions and other ways to cut are laid bare. Do you have a large number in the interest income box? Is the IRA box empty? Look for tax shelters. Is your dividend income number large? Move dividend-paying investments to IRAs and keep capital gains taxed investments outside of tax shelters. The itemized deductions page is chock full of opportunities. Are you taking advantage of gifts to charity, tracking your medical costs or unreimbursed employee expenses? They’re all listed on the itemized deductions page. Here’s a stress reliever: Even tax preparation fees may be deductible.

[See: 7 Most-Missed Tax Deductions and Credits.]

4. Hire the right pro. While there isn’t a single best way to finish your tax return, choosing the right method for you will relieve stress and help you smoothly navigate tax day. When it comes to free filing, 12 different companies partner with the IRS to offer free tax preparation tools. The IRS has an easy-to-use portal, which will guide you through the tax-filing process.

Reducing your tax preparation fees can relieve stress, as can finding the right tools if you aren’t eligible for free software. Use an enrolled tax agent if you have a fairly simple tax situation but don’t qualify for free prep. This person has passed a test administered by the IRS, confirming that they know the basics of the tax system. CPAs are better if you have a more complicated situation, and can be excellent at planning for future years, since part of the CPA exam is on future tax planning. While a tax attorney is fantastic at fighting legal tax battles, there are very few instances where paying more for a tax attorney to complete your return makes sense. Finally, tax-filing software today is excellent. Don’t expect much in the way of tax planning from your software. While it’ll ask all the right questions for this year’s return, you’ll want outside help setting up next year’s return to look just as pretty as you’d like.

5. File an extension. If you’re overwhelmed and know that there’s no way you’ll complete your taxes by the deadline, take a deep breath and file an extension. The bad news? You’ll still need to complete a tax form outlining what you think you owe. You’ll also have to send in any money owed to avoid big tax penalties … but you’ll give yourself until mid-October to dot the i’s and cross your t’s.

Tax day doesn’t have to be stressful. By applying a simple plan of attack and reading just a few pages of the tax form, you’ll be on your way to refocusing on making more money today and spending less time worrying about the money you earned last year.

More from U.S. News

8 Ways You Can Prepare Now for Next Year’s Taxes

9 Red Flags That Could Trigger a Tax Audit

10 Smart Ways to Spend Your Tax Refund

Podcast: 5 Ways to De-Stress During Tax Filing Season originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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