Is it too early to start planning for next year tax returns?
No! October begins the last calendar quarter for 2016 where individuals and most businesses begin preparing for year-end and planning for 2017. Saving time and money in 2017 preparing your 2016 tax returns require planning and organizing now. Want to have stress free tax season? Take the following tips as individuals.
Your 2016 tax returns
Keeping a copy of your tax returns in safely comes handy when you need them to apply for loan, refinance or financial aid. Also if you have moved and would change your tax accountant next year, your new accountant would need a copy of your 2015 returns.
Completing a new Form W-4
When you complete this form on starting a new job, you indicate the number of withholdings which translate into how much tax your new employer would withhold from your paycheck. Social security and Medicare withholding rates are set at 6.2% and 1.45% respectively and capped at $117,000 for social security withholding only. If you received a significant refund on filing your 2015 tax returns, the chances are your withholdings are too high. If you’re expecting life changing situations such as buying a house, marrying, having a new baby, adopting etc by 12/31/2014, it’s time to consider adjusting your tax withholdings.
Tax Law Changes
Tax laws are always changing. You don’t have to be a tax professional to stay updated with the changing tax laws. At least twice a year, check with your accountant around mid-year and last quarter of the year if you need to make any change to your withholdings or take advantage of a tax credit before the year ends.
Carefully organizing and storing your documents are great ways of time and money savings at tax time. Buy a folder from your neighborhood Office Depot/Staples to store all your tax related records. At year end you would not spend hours looking for important tax records or correspondences. Your accountant would reward you with a low fee because you organize your records.
Tax Help & Advice
If you need more tax advice or tax preparation help, just let us know.