Action Item: Start gathering your tax documents and save them all in one place using Google Drive or Dropbox. Name each document with its form number and account name, keep everything organized in yearly folders, and begin working on your taxes now.

Summary

In this episode, I break down how to make tax season simple instead of stressful. I walk you through my exact system for organizing tax documents, choosing the right software (I use FreeTaxUSA), and filing your taxes with confidence. I explain how you can flip a small tax bill into a refund by contributing to your HSA or traditional IRA before the tax deadline, and I share strategies for planning ahead throughout the year, like capital gain harvesting and updating your W-4 after major life changes. The key takeaway: taxes don't have to be complicated or scary when you have a simple system in place. Plus, I bust the myth about losing money to taxes when you get a raise by explaining marginal versus effective tax rates.

Resources & Links Mentioned

6 Tips for Organizing Your Tax Information: https://blog.taxact.com/organizing-your-tax-information/

How to Do Taxes: A Step-by-Step Guide (Accounting.com): https://www.accounting.com/resources/how-to-do-taxes/

FreeTaxUSA (tax filing software): https://www.freetaxusa.com/

Ten Tax Saving Ideas for Young Professionals and Recent College Grads: https://schwartzaccountants.com/2024/09/ten-tax-saving-ideas-and-opportunities-for-young-professionals-and-recent-college-grads/

We Were NEVER Taught About Taxes (Let’s Fix That) - 9: https://youtu.be/hLrqeDfxTV4

6 Common Mistakes When Filing Taxes (TurboTax article): https://turbotax.intuit.com/tax-tips/irs-tax-return/common-mistakes-when-filing-taxes-that-are-easy-to-avoid/L4WkkAiCT

Timestamps

[03:18] How to organize your tax documents with Google Drive folders

[07:10] My secret strategy: Contributing to last year's IRA or HSA to flip a tax bill into a refund

[08:12] Tax planning for next year: Capital gain and loss harvesting

[09:42] Common tax mistakes to avoid (especially filing too early and over-contributing to your IRA)

[12:21] Alex and Jordan's case study begins: Married couple earning $167K who owed $350 last year

[14:46] What tax documents you actually need (W-2s, 1099s, and form 5498)

[17:25] How to handle capital gains in your brokerage account

[18:32] Using HSA contributions to reduce a tax bill by hundreds of dollars

[21:18] Marginal vs. effective tax rate: Why a raise won't destroy your tax situation

Email me at fpyapod@gmail.com