Tax Planning Tips for Next Year's Tax Return

For many taxpayers, the tax deadline has passed. But planning for next year can start now. If you’re organized and plan ahead, you can save time and money next year. Here’s a few things to make next year easier.

1. Adjust your withholding. Each year, millions of American workers have far more taxes withheld from their pay than is required. Review your withholding level to make the taxes withheld from your pay closer to the taxes you’ll owe for this year. If you owed tax when you filed, you may need to increase the federal income tax withheld from your wages. Check with your tax professional or use the IRS Withholding Calculator at IRS.gov to complete a new Form W-4, and give it to your employer.

2. 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 (for example if you’re applying for a home loan or financial aid), you’ll know where to find it.

3. 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.

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. Look for a professional that can navigate the tax code for your benefit, not just someone to prepare your return. They should be willing to discuss tax strategy with you now as well as help when it comes time to file taxes.

5. Consider Amending Prior Years. Remember that a large majority of taxpayers have overpaid their prior year taxes. You can amend three years back and still get any additional refunds due you. In many cases this can be thousands of dollars. Now is a great time to have your tax returns for prior years reviewed to see if there are additional funds you might be able to recover. Your tax professional should be willing to do the review for free.

So take a little time right now to make a few adjustments and you’ll be very glad you did when tax time rolls around again.

By: Evan A. Nielsen, Esq. (Licensed in California)