2012 Tax Planning begins now?

Tax Planning begins early in the year and not at year end.

Taxpayers that are organized and can plan ahead save time, money and headaches at year end and during the next filing season. This is what the IRS recomends you can do now to make next April 15 easier.

• Adjust your withholding- To review your withholding and make adjustments for next year, especially if you'd prefer more money in each paycheck this year. If you owed at tax time, perhaps you'd like next year's tax payment to be smaller.  
• Secure your return in a safe place-  Put your 2011 tax return and supporting documents somewhere secure so you'll know exactly where to find them if you receive an IRS notice and need to refer to your return.  
• Organize your current records-  Establish a central location where everyone in your household can put tax-related records all year long. 
•  Review your witholding- Look at your paycheck and make sure your employer is properly withholding and reporting retirement account contributions, health insurance payments, charitable payroll deductions and other items. 
• Shop for a tax professional early- If you use a tax professional to help you strategize, plan and make financial decisions throughout the year, then search now. You'll have more time when you're not up against a deadline or anxious for your refund. Choose a tax professional wisely. You are ultimately responsible for the accuracy of your own return regardless of who prepares it.  
• Prepare to itemize deductions wisely- If your expenses typically fall just below the amount to make itemizing advantageous, a bit of planning to bundle deductions may pay off. An early or extra mortgage payment, pre-deadline property tax payments, planned donations or strategically paid medical bills could equal some tax savings. 
• Strategize tuition payments- The American Opportunity Tax Credit, which offsets higher education expenses, is set to expire after 2012. It may be beneficial to take full advantage of this tax credit, up to $2,500, before it expires.  

The IRS emphasizes that each household's financial circumstances are different so it's important to fully consider your specific situation and goals before making large financial decisions

 

Special Edition Tax Tips from the IRS.  http://www.irs.gov/

 

 

 

 

 

 

 

Hit Counter