1) Check your Withholding & Payroll Deductions - If your Refund check was big this year, you can adjust you paycheck withholding so that you can get a bigger paycheck. If your withholding is adjusted correctly you don't have to wait till the end of the year for your money rather right away. However, if you owed taxes, you can adjust your withholding to be higher so that you don't have to write a big paycheck to the IRS at the end of the year.Make sure your Paycheck deductions like Health Insurance, Retirement Contributions etc are being correctly withheld and reported by your employer. Any of these deductions reported incorrectly could make an impact on your Tax liability at the end of the year. It is easier to get this fixed early on than later.
2) Organize your 2011 Tax Returns and all future Tax Documentation & Receipts - Make sure your 2011 Tax Returns and all the supporting documents are kept in a secure place. In case, you get a notice from the IRS, if you have all your paperwork available to you it will be easier for correspondence. Also, for 2012 return it will prove as a good reference tool. Organization is the key to a better prepared 2013 Tax Return. Make sure you keep all your documents related to 2013 tax returns in one place. Make sure all family members know of this place as well so that all your documents are easier to find and you do not miss any important information for your record keeping. Ex. Charitable Contributions Receipts, Sales Tax Receipts etc. As long as it is all in one place it does not make a difference if it is in a file, shoe box or a drawer. Consistency and persistence pays off during tax time
3) Strategic Itemized Deductions & Credits - If you were not able to itemize your deductions this year or missed the itemized deductions by just a few dollars, now is a good time to plan ahead and make sure you are able to take full advantage of all the deductions and credits available to you. See Schedule A for all the expense categories applicable to you and make sure you are taking full advantage of it. For example, by making an extra mortgage payment before the end of the year, making sure you pay your medical bill ahead of time, charitable donations you can make sure you will take full advantage of Itemized Deductions.
4) Update yourself with any tax law changes - IRS updates its website the whole year about any tax law changes to affect your Tax Returns. Check the IRS website regularly to make sure if any change is applicable to you. For example, after 2012, the American Opportunity Tax Credit which is a credit for higher education expenses will no longer be valid. This credit allows you to get a maximum of $2500 of tax credit. To take full advantage it might be a wise idea not only to pay 2012 tuition but also pay 2013 tuition in advance to get the maximum advantage of this tax credit.
5) Let a Tax Professional guide you - Choose a tax professional early on who can help you be more prepared for doing your tax returns. If you work with a professional early in the process you will save yourself a lot of frustrations during tax time regarding strategies or last minute issue. Choosing a tax professional is a very serious issue and should be done very carefully. Let Maxim Tax Services help you with this decision. Call us at 954-362-9927 for more information or visit us at www.maximtaxservices.com.
