Saturday, September 19, 2015

Tips to Help You Plan for the Next Tax Season

The April 15th tax deadline is gone, your taxes are done, but why should you even still have an interest in your taxes?
You don’t have to jump into tax planning at this very moment, but you should be aware of some things that you can do throughout the next year so you will get the maximum tax refund possible next year. The 6 tips below will help.
2016 Tax Year Tips:
  • Get and Stay Organized. Your taxes are already filed, but staying organized will make filing next year much easier. Create a file for financial records and other important documents. That way you will be ahead of the game next year at tax time.
  • Take A Closer Look At Your W-4 Withholding. Was your tax refund a big one this year? You should consider adjusting your withholding. These are the taxes taken from your salary by your employer. You can update them by re-filing your W-4 form with the payroll department. WithTurbo Tax W-4 calculator, you can estimate your exemptions and update your W-4 form anytime during the year.
  • Donate to Charities before year’s end.  When filing your taxes next year, you can minimize your tax liability by making charitable contributions in money or goods. Made use of TurboTax Its Deductible to track your charitable donations all through the year. The app will convert your donations into tax deductions and will make importing the appropriate info into Turbo Tax easy at filing time.
  • Contributing to retirement funds to reduce taxable income. Planning for your retirement can help to reduce your tax burden for next year. For every dollar you contribute to your 401(k) or Traditional IRA you will get an equivalent reduction in your earned income when filing your taxes. For the year 2015 you are allowed to contribute $18,000 to your 401K and if you are over 50 years old that increases to $24,000. For your traditional IRA you can contribute up to $5,500 or $6,500 if you are 50 or older.
  • Di you pay tax penalty for 2014? Then sign-up for healthcare. Did you pay a tax penalty in 2014 for not having health insurance? Then you have until the deadline of April 30 to enroll in the Marketplace plan unless you have gone through a special life event. You will avoid having to pay the tax penalty next year, which is expected to go up to $325 for an adult and $975 per family or as much as 2% of your income, whichever figure is bigger.
  • Update financial information in the Health Insurance Marketplace. You will need to update your financial details in the Marketplace if you purchased insurance during the previous Open Enrollment and you got a tax credit to help with insurance coverage fees. By doing this you are getting the maximum allowable help you are entitled to while not having to repay extra tax credits, which you will not be eligible for next year.