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RANDOM QUICK TAX TIPS FROM THE BEAUTIFUL MIND OF STIKKS #7: Importance of Tax Planning

6:25 PM Jamaal Solomon 0 Comments Category :

RANDOM QUICK TAX TIPS FROM THE BEAUTIFUL MIND OF STIKKS


Sometimes it get so lonely being an tax accountant. Some of my clients only see me during tax season. Damn it, I have feelings too. Why don't those clients call me? Is it my appearance that throws them off? Luckily, I have a great family so that eases the pain. Seriously, it is very important to have quarterly meetings or calls with your tax accountant. Sometimes, clients owe big money that a simple call to an accountant could have save them. For example, one of my clients withdrawn from their 401k account. The client assumed that the withdrawal was tax free and didn't inform me. Also, the client didn't know about the 10% penalty for withdrawing before 59 and half years old. This resulted in a tax bill over $10,000. The client spent all of the money before filing tax returns and didn't have enough to pay debt on tax return. This debt could have been prevented if the client simply asked for advice before taking out the money. Tax planning is extremely important but rarely used by the average taxpayer. Lets see what the IRS says about tax planning. It is a "oldie but goodie" article located on the official IRS website:

Tips to Start Planning Next Year's Tax Return

IRS Tax Tip 2013-62, April 24, 2013

For most taxpayers, the tax deadline has passed. But planning for next year can start now. The IRS reminds taxpayers that being organized and planning ahead can save time and money in 2014. Here are six things you can do now to make next April 15 easier.

Adjust your withholding.  Each year, millions of American workers have far more taxes withheld from their pay than is required. 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. Use the IRS Withholding Calculator at IRS.gov to complete a new Form W-4, Employee's Withholding Allowance Certificate.

Store your return in a safe place.  Put 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.

Organize your records.  Establish one location where everyone in your household can put tax-related records during the year. This will avoid a scramble for misplaced mileage logs or charity receipts come tax time.

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.

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. See the Schedule A, Itemized Deductions, instructions for the list of items you can deduct. Planning an approach now that works best for you can pay off at tax time next year.

Keep up with changes.  Find out about tax law changes, helpful tips and IRS announcements all year by subscribing to IRS Tax Tips through IRS.gov or IRS2Go, the mobile app from the IRS. The IRS issues tips regularly during the summer and tax filing season.

You can find forms and publications at IRS.gov or order them by calling 800-TAX-FORM (800-829-3676).

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Name: Jamaal Solomon





   

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