The tax deadline may have just passed but planning for next year can startnow. The IRS reminds taxpayers that being organized and planning ahead can savetime, money and headaches in 2013. Here are eight things you can do now to makenext April 15 easier.
1. Adjust your withholding Why wait another year for a bigrefund? Now is a good time to review your withholding and make adjustments fornext year, especially if you'd prefer more money in each paycheck this year. Ifyou owed at tax time, perhaps you'd like next year's tax payment to be smaller.Use IRS's Withholding Calculator at www.irs.govor Publication 919, How Do I Adjust My Tax Withholding?
2. Store your return in a safe place Put your 2011 taxreturn and supporting documents somewhere secure so you'll know exactly whereto find them if you receive an IRS notice and need to refer to your return. Ifit is easy to find, you can also use it as a helpful guide for next year's return.
3. Organize your recordkeeping Establish a central locationwhere everyone in your household can put tax-related records all year long.Anything from a shoebox to a file cabinet works. Just be consistent to avoid ascramble for misplaced mileage logs or charity receipts come tax time.
4. Review your paycheck Make sure your employer is properlywithholding and reporting retirement account contributions, health insurancepayments, charitable payroll deductions and other items. These payrolladjustments can make a big difference on your bottom line. Fixing an error inyour paycheck now gets you back on track before it becomes a huge hassle.
5. Shop for a tax professional early If you use a taxprofessional to help you strategize, plan and make financial decisionsthroughout the year, then search now. You'll have more time when you're not upagainst a deadline or anxious for your refund. Choose a tax professionalwisely. You are ultimately responsible for the accuracy of your own returnregardless of who prepares it. Find tips for choosing a preparer at www.irs.gov.
6. Prepare to itemize deductions If your expenses typicallyfall just below the amount to make itemizing advantageous, a bit of planning tobundle deductions into 2012 may pay off. An early or extra mortgage payment,pre-deadline property tax payments, planned donations or strategically paidmedical bills could equal some tax savings. See the Schedule A instructions forexpenses you can deduct if you're itemizing and then prepare an approach thatworks best for you.
7. Strategize tuition payments The American Opportunity TaxCredit, which offsets higher education expenses, is set to expire after 2012.It may be beneficial to pay 2013 tuition in 2012 to take full advantage of thistax credit, up to $2,500, before it expires. For more information, see IRSPublication 970, Tax Benefits for Education.
8. Keep up with changes Find out about tax law changes,helpful tips and IRS announcements all year by subscribing to IRS Tax Tipsthrough www.irs.govor IRS2Go, the mobile app from the IRS. The IRS issues tips regularly duringsummer and tax season. Special Edition tips are sent periodically with othertimely updates.
The IRS emphasizes that each household's financial circumstances aredifferent so it's important to fully consider your specific situation and goalsbefore making large financial decisions.
Please contact us if you have any questions. 801-269-1818
Links:
- IRS Withholding Calculator
- Publication 919, How Do I Adjust My Tax Withholding? (PDF)
- 2011 Form 1040 (Schedule A) (PDF)
- Publication 970, Tax Benefits for Education (PDF)
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