Now is a Good Time to Plan for Next Year’s Taxes

From the Desk of Michael T. McCormick

Now is a Good Time to Plan for Next Year’s Taxes

You may be tempted to forget about your taxes once you’ve filed but some tax planning done now may benefit you later. Now is a good time to schedule an appointment to implement a strategy designed to save tax and reduce audit risk. Good planning within the tax year can go a long way toward minimizing your effective tax rate. Contact our office to schedule a strategy meeting! In addition, it is a good time to set up a system so you can keep your tax records safe and easy to find.

Here are some simple tips to give you a leg up on next year’s taxes:

Take action when life changes occur. Some life events can change the amount of tax you owe. Examples include a change in marital status or the birth of a child. When these happen, you may need to change the amount of tax withheld from your pay. To do that, file a new Form W-4, Employee’s Withholding Allowance Certificate, with your employer. It is also a good idea to review your estate plan to determine if changes need to be made. Our legal team is ready to help!

Report changes in circumstances to the Health Insurance Marketplace. If you enroll in insurance coverage through the Health Insurance Marketplace for 2016 coverage, you should report changes in circumstances to the Marketplace when they happen. Report events such as changes in your income or family size. Doing so will help you avoid getting too much or too little financial assistance.

Keep records safe. Print and keep a copy of your 2015 tax return and supporting records together in a safe place. This includes W-2 Forms, Forms 1099, bank records and records of your family’s health care insurance coverage. If you ever need your tax return or records, it will be easier for you to get them. For example, you may need a copy of your tax return if you apply for a home loan or financial aid for college. You should use your tax return as a guide when you do your taxes next year but our handy organizer will be mailed to you in January and is the easiest way to ensure that we take advantage of every opportunity to save you money and to guarantee nothing is missed in preparing your returns.

Stay organized. Make tax time easier. Have your family put tax records in the same place during the year. That way you won’t have to search for misplaced records when you file next year.

Think about itemizing. You may be able to lower your taxes if you itemize deductions instead of taking the standard deduction. Owning a home, paying medical expenses and qualified donations to charity could mean more tax savings.

Stay informed. Bookmark this blog to follow my Friday tax tips throughout the year. I use this as a forum to keep you informed and to alert you to any changes in the tax laws.