While taxes can seem tricky at times, there are still some easy options for individuals to consistently maximize their benefits and minimize their liabilities. A few specific behaviors can help you navigate just about any complexity with the tax system before it gets overwhelming—especially if you have the right team!
What Are the Best Tax-Saving Habits?
Whether you’re expecting to receive a big refund after filing your return, or you suspect that there will be an increase in what you owe next year, it’s always wise to plan ahead. Taking action now with a few simple steps can help ensure that next year’s bill will be optimized and budget-friendly. You don’t want to overpay. And you don’t want to get caught with any surprises either.
1. Review Your Paycheck Withholdings
Savvy taxpayers tend to take a closer look at their estimated tax payments year over year. Being able to forecast your earnings and make decisions about your withholdings based on what you’ve owed in the past is critical.
As a general rule, you want your paycheck withholdings on your Form W-4 to cover 90 percent of the coming year’s tax bill. Run the numbers now. Then if you need to increase or decrease those amounts, you’ll still have time to connect with your employer to make the adjustments before year’s end.
2. Don’t Wait to Organize Your Records
It’s all about baby steps. Getting in the habit of staying organized throughout the year will help keep you from scrambling come next spring.
One good practice is to set up your records with the same flow of your Form 1040. That means putting your income documents first, then the supporting docs for your deductions, followed by any credits and your estimated payment. Not only will this help you and your tax preparer complete the Form 1040 itself, you’ll also be in a better position to deal with an audit.
3. Schedule Your Tax Planning Session
While there are plenty of tax prep actions you can complete on your own, it’s nice to have a guide along the way. Strategic tax planning can give you the insights you need to make informed financial decisions, and potentially uncover opportunities to improve your own tax position. You don’t need to wait to touch base with your accountant or tax preparer until the springtime. Consider scheduling a tax planning session now to get a jump on your filing and explore new ways to save!
Tax Planning & Accounting for Central Indiana
NSO & Company works with clients throughout the year. Not only that, we’re passionate about building relationships and digging deep to make sure we’re helping to keep your tax liability low. It’s normal to have questions as your life circumstances change. Let’s help you navigate those shifts.
Please don’t hesitate to reach out to our team at (317) 588-3131. Then we can schedule a time to talk and make sure you’re on track for success. We always welcome new clients, from individuals and families, to small business owners and more!