For most people, taxes are put on the back burner after they file their tax return. Why not start planning ahead now to avoid stress later on down the road? Below are five tips provided by the IRS to help you start planning for your 2014 tax return:
- Take Action When Big Life Changes Occur. The amount of taxes you owe can fluctuate with a change in marital status, the birth of a child, and buying a home. If these events occur in your life, you may need to adjust the amount of taxes taken out of your pay. To do so, you need to file a new Form W-4 (Employee’s Withholding Allowance Certificate) with your employer. The IRS Withholding Calculator is a great tool to help you fill out said form. In addition, if you receive advance payments of the premium tax credit, you must report changes in circumstances (i.e. changes in income, family size, and to your Health Insurance Marketplace).
- Keep Your 2013 Tax Documents and Keep Them Safe! This is important if you ever need to refer to your 2013 tax return. You can use it as a guide for next year’s tax return preparation and you may need a copy of it if you apply for a home loan or financial aid.
- Organization is Key. Keep your family’s tax records together and in the same place during the year. You can avoid the hunt for misplaced documents come tax time next year by staying organized.
- Think About Itemized Deductions. Do you usually claim a standard deduction on your tax return? If you itemize deductions instead, you maybe able to lower your taxes. Donating to charity could also mean tax savings. For a list of deductions, check out these instructions for Schedule A, Itemized Deductions.
- Keep Up to Date With Tax Laws and Regulations. Check out our Facebook, Twitter, and LinkedIn pages to be in the know! In addition, the IRS regularly provides updates and tips and tricks throughout the year. These can all be found at their website IRS.gov or their mobile app, IRS2Go.
Keeping ahead of the game now can really pay off come tax time next year. As always, feel free to contact us with any questions!
Source: IRS.gov, IRS Tax Tip 2014-61