Tips
to Start Planning Next Year’s Tax Return
It’s certainly not too early to begin planning for next year’s tax return. Though, for most taxpayers, the deadline for this year has just recently passed, the countdown for next year has already begun. Planning for next year should start now. The
earlier you begin preparing for the next tax filing season, the better prepared you will be, maximizing your deductions and tax credits. Being organized and planning ahead also will save time and money in 2014. Here are six things you can do now to make next April 15 easier.
1. Adjust your withholding. Each year, millions of American workers have far more taxes withheld from their pay than is required. That is like giving the government an interest-free loan it doesn’t need. Now is a good time to review your withholding to make the taxes withheld from your pay closer to the taxes you’ll owe for this year. This is especially true if you normally get a large refund and you would like more money in your paycheck. If you owed tax when you filed, you may need to increase the federal income tax withheld from your wages.
2. Store your return in a safe place. Put away your 2012 tax return and supporting documents somewhere safe. If you need to refer to your return in the future, you’ll know where to find it. For example, you may need a copy of your return when applying for a home loan or financial aid. You can also use it as a helpful guide for next year’s return. Also, in the unfortunate instance where your return is picked for an examination by the IRS, it would be helpful to easily locate your records.
3. Organize your records. Establish one location where everyone in your household can put tax-related records during the entire year. This will avoid a scramble for receipts, misplaced mileage logs or charity receipts come tax time.
4. Shop for a tax professional. If you use a tax professional to help you with tax planning, start your search now. You’ll have more time when you’re not up against a deadline or anxious to receive your tax refund. Choose a tax professional wisely. You’re ultimately responsible for the accuracy of your own return regardless of who prepares it. Find tips for choosing a preparer at IRS.gov.
5. Consider itemizing deductions. If you usually claim a standard deduction, you may be able to reduce your taxes if you itemize deductions instead. If your itemized deductions typically fall just below your standard deduction, you can ‘bundle’ your deductions. For example, an early or extra mortgage payment or property tax payment, or a planned donation to charity could equal some tax savings. Planning an approach now that works best for you can pay off at tax time next year.
