Category: Tax Tips
How can I prepare for next years taxes?
For most taxpayers, the tax deadline has passed and you have already filed your returns, but planning for next year can start now. Here are a few tips that you can do to make filing your next years tax return much easier, more organized, and less time consuming.
1. Adjust Your Withholding(s): Every year, millions of taxpayers have far more taxes withheld from their pay than is required. Now is a good time to review your withholding(s) to make the taxes withheld from your pay closer to the taxes you will owe for the next tax year. This is important if you normally receive a large refund and you would like to have more money in each paycheck. If you owed taxes when filing, you may want to increase the federal tax withheld from your wages. Use the IRS Withholding Calculator to see if you should complete a new Form W-4, Employee's Withholding Allowance Certificate, with your employer.
2. Store Your Return in a Safe Place: Store your most recent tax return and supporting documents (W-2's, 1099's, etc.) in a safe place. If you need these documents in the future, you will know exactly where to go to find them. For example, you may need a copy of your tax return when applying for a home loan or financial aid.
3. Organize Your Records: It is a good idea to establish one location where everyone in your household can store their tax-related documents throughout the year. This is helpful to avoid having to scramble for misplaced tax documents necessary to complete your return come tax time.
4. Consider Itemizing Your Deductions: If you normally claim the Standard Deduction, you may be able to reduce your tax liability if you itemize instead. If your Itemized Deductions generally fall just short of your Standard Deduction, you can bundle your deductions. For example, an early or extra mortgage payment or property tax payment could offer some tax savings as well as a planned donation to a charity. To see a complete list of items you can deduct, please refer to the Schedule A, Itemized Deduction instructions.
Note: The program will automatically select the better of the two deductions for you based on the information entered in your return.
5. Keep Up with Changes: It is a good idea for you to keep up with IRS tax law changes, helpful tips, and IRS announcements all year to see how these changes could affect you come tax time. You can subscribe to IRS Tax Tips through IRS.gov or downloading the IRS2Go mobile app for your smartphone, tablet, or iPad.