When budgeting your tax money it’s important to know the basics of doing a spreadsheet for a budget, especially since there are many variations. You need to make sure that you understand what each column represents before you create your own spreadsheet.
The first thing that you need to know is what a budget is. Every taxpayer has their own, and that can be confusing at first. A budget is basically a plan for how you’re going to spend the money that you earn. It is designed to help you see where you’re spending your money and how much you have available to put toward debt or savings.
There are three basic types of budgets, which include the Earned Income Tax Credit (EITC), Child Tax Credit (CTC) and Salary Information. Each of these can be added on top of each other, but the EITC and CTC can’t be used as a standalone when making a budget. The EITC is for non-child dependent income, and the CTC is only good if the income is used for the tax liability. The other two types are based on the income of the children. If your family is like mine, then the EITC is the best option for you, but the CTC can give you a little bit of extra if you’re married filing jointly.
You’ll also need to know the tax laws that you will be charged depending on your income, and when you see that you’ve already paid all of your taxes and are now facing a current tax bill, you should go over your expenses with a fine-tooth comb and try to figure out where you may have left some money that you don’t think you paid. If you find that you have a lot of money left over that you didn’t think about, then there is probably some room in your budget to pay it off.
This is how you want to think about your finances and how to use them as an effective tax reduction strategy. Although I’ve been known to try and save a few dollars here and there, most of my time is spent looking for ways to make a large chunk of money to go away.
Also, if you don’t have any money to put toward your future tax return, you should definitely make sure that you have as much of a budget as possible. You should start with the present budget and then build from there so that you can plan for a future without those fees and penalties.
As a rule of thumb, you will always want to make sure that you only pay off your bills and take care of your bills as soon as possible, even if you can’t afford to do so right now. This will help you lower your current tax bill, which is your largest expense.
And don’t forget, if you haven’t paid any tax for six months, it’s a good idea to make a spreadsheet for a budget so that you have a way to track your spending. You can even add in other expenses that might not seem like bills to you, such as groceries, haircuts, etc. before you pay for any of those.