Tax Tips for the Year Ahead

Tax Tips for the Year Ahead

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Tax season means looking back, specifically at the calendar year just ended. That makes sense as you have only until April 15 to get your taxes in order, prepared and sent off to the IRS and to your state’s taxing authority. At the same time, you should begin this year’s tax planning now to take advantage of certain benefits and strategies that can help you. Don’t delay: your efforts will pay off especially if you act sooner rather than later.

Meet With Your Tax Advisor

Is your tax advisor and your tax filer one and the same? That’s not a bad approach to take especially if your advisor has been working with you to manage your taxes. Even if you do your taxes yourself or use another professional to help you out, you can share your tax information with your advisor.

Meeting with your tax advisor is important if you have had any change in your living circumstances within the past year including a marriage, divorce, a new child, or other life change. You can also recap the past year and look at your options for the next year or years ahead.

Contribute to Your Retirement Account

Is your retirement account fully funded? What that means is this: are you taking advantage of your company’s 401(k) or other retirement plan? Do you have an IRA and have you been contributing money to it regularly?

Your tax advisor can discuss with you your funding options as well as what other investments to make to help aid your cause. Stocks, municipal bonds, foreign holdings, real estate and other options should be put on the table. Examine ways that you can reduce your tax liability and keep more of the money that you earn.

Pay Your Taxes on Time

If you work for someone, then your taxes are withheld every pay period. If you work for yourself, you need to pay your taxes quarterly. Miss a payment and you will face fines and penalties, perhaps even a dreaded IRS audit.

If you own a small business, there are other taxes you are responsible for paying. These include employment taxes — Social Security, Medicare, unemployment taxes, and both state and federal income taxes. You may also have taxes on worker’s compensation, personal and real property, use taxes and occupation taxes. If you collect sales tax you need to remit those funds as per your local or state government.

Get Your Files in Order

Your last year’s tax file is likely full, waiting perhaps for the last W4 and 1099 forms before you file your taxes. You should also receive receipts from your pharmacist to track the funds paid for prescriptions last year and obtain other needed tax forms.

You should also set up your file for the new year, adding the required receipts that will come in handy next tax season. Keep in your file home refinancing information, registration fees, property tax receipts and other tax deductible forms.

Tax Considerations

Make a plan to keep track of your taxes throughout the year, perhaps performing quarterly and semiannual reviews to ensure that you’re on track. And keep your ear open for tax law changes made in throughout the year that can impact your taxes going forward.

See AlsoFederal Payment Options and Your Payment Options

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