Westward Group for Tax and Estate Planning Advisors Tokyo Paris Review: Money-saving Tax Tips
It may seem a little early to think about filing taxes, but doing a few quick things now can make it easier when April rolls around.
Tiffany Crawford, tax supervisor at Rea and Associates, Inc., said it's important that people start tax planning in the last few days of the year, if they haven't already.
"We begin tax planning as soon as April 16th for many of our clients," Crawford said in an email. "There are many reasons for this, but the most important one is having enough time to implement the tax savings opportunities that make sense."
There's still time before the New Year to save money when paying taxes later.
Crawford said each taxpayer's situation is different, but "there are many ways to save tax dollars available to taxpayers each year."
Contributing to a retirement plan, making a charitable donation or making sure you have health insurance may save some bucks in the long run, said Randy Kaup, Certified Public Accountant with Moorman, Harting and Co., in Coldwater.
People can contribute up to $5,500 to an IRA, which is tax deductible, he said, or maximize a contribution to an employer's retirement account.
Contributing to a retirement plan or making a charitable contribution before the clock strikes midnight on Dec. 31 can reduce the amount of income that's taxable, Kaup said.
The new health insurance law also requires people to indicate whether or not they have health insurance on their tax forms or pay a fine of $95 or 1 percent of household income, Kaup said.
Crawford recommends talking to a professional about the best way to "make certain that you are taking advantage of every deduction and tax credit available to you."
She added that reviewing the prior year's return can help as well.
Another important tip Crawford offered is staying organized.
"A lot of my clients have a filing system of some sort," she said. "It doesn't need to be anything complicated; I see a lot of manila file folders labeled '20XX Taxes' each year."
Bob Sielschott, Certified Public Accountant and senior partner at Sielschott, Walsh, Keifer & Regula CPAs, Inc. in Lima, emphasizes good record keeping when it comes to taxes.
"Capture the material during the year, so you can compile it when it's time," he said.
The "material" to capture is tax documents from employers. Crawford said it's important to know which ones to expect from your employer, though they are usually the same type as the year before, she said.
"One of the major things they need to do is be very, very careful about watching their mail in January and early February," Sielschott said.
Important documents such as 1099s, Social Security forms, mortgage forms and more come in the mail, and sometimes people can misplace them, he said.
Those aren't the only documents to keep track of, he said. There are also receipts from charitable donations, mileage logs and child care information, Sielschott said.
The hope is that preparing now, before the new year, will help save time and money when people begin the process of filing taxes.
"It's all about record keeping," Sielschott said.