Goal templates > 7-understand-how-your-taxes-work-to-save-money
Why try this

Financial literacy often revolves around earning and spending while the topic of taxes tend to be glossed over or skipped altogether. You don't have to end up being an expert at taxes but knowing the main pillars of how your tax calculations work could not only help you ensure you are legally compliant but also form a big part of your financial planning.

How to track progress
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Study last tax submission and identify unknown areas
Understand your eligibility and groupings
Research how deductions work
Compile list of deductables
Search for online tools or reputable forums with tips
Plan for this year's taxes
Guiding tips

Here's more information regarding milestones or tips to help with your goal in general, so read on further to see what we've pulled together to help you work towards your goal. Go start something new today!

Image depicting the section for Find out what you don't know
Find out what you don't know

It can be tempting to just file as quickly as you can but you've definitely gone through the paperwork to realise that you don't exactly understand every part. Take some time to note down these sections and make attempts to get a gist of what they mean. Your tax office typically makes FAQ pages or guides so try and utilise them as best you can. If you have someone in the family or circle of friends that you know has a good handle on the taxes arena remember to reach out and ask for guidance!

Image depicting the section for Understand your eligibility
Understand your eligibility

Now that you've found out a couple of areas which sound probable in terms of exploring for deductions or exemptions, see if you are truly able to take advantage of these. Eligiblity can be the trickiest part to figure out as there can be multiple conditions that prevent you from being included in a particular group. In countries with e-filing this might be simpler as help text is usually included with form fields but if you're in a less tech savvy process you might need to put in extra legwork to be sure.

Image depicting the section for Learn from struggles of others
Learn from struggles of others

You'll find countless forums discussing problems you have in understanding the finer points of taxes which is great news as you'll be able to learn a thing or two from others who have clarified their doubts. A point of caution needs to be highlighted here - not all information is up to date or verified. This means you might need to ensure you cross-check the findings before congratulating yourself on finding smart ways to save.

Image depicting the section for Plan early for the next tax cycle
Plan early for the next tax cycle

Getting a leg up means starting early so you can fully understand each part of your filing. Administrative matters involving enquiries to the tax department can take a long time so start early! Make sure to keep this activity as part of a larger financial plan for yourself so you have a good sense of budgets for the entire year and teach some tips back to the community for maximum feel-goodness :)