You sure you got all your stuff done for taxes?Fiscal Fitness Clubs of America
Said with an old time western drawl, “Whoa Pardner! Don’t be in such a dang-fired hurry. You sure you got all your stuff done for taxes?”
We know. You just want it done! The deadline is looming. But slow down just a minute as you fill in all those forms or gather the documents to send off to somebody else to complete. Even if you’ve already gotten your taxes submitted, take a few minutes to consider the following:
- Even AFTER you file, as long as you do it before April 18th 2017, you can still make contributions to SEP IRAS, IRAs, Roth IRAs and HSAs. It might be worth it to file an amended return! You don’t even have to fund the maximum amount, so if you’ve got $500 you can commit to your future, you’ve got an opportunity. Seven states even let you make contributions to 529 plans for the prior year.
- Take the time to project this year’s taxes. By doing so, you can reap several benefits
- You can use the projection and compare it against our indicators list to see if there are tax benefits you might qualify for to reduce the tax bill next year if you follow the rules.
- By identifying what strategies you might want to use, you can make sure that you follow the rules so you get tax deductions. For example, don’t give tuition money directly to your child. Instead, either pay the tuition directly to the institution, if you can qualify for the tax credit, or put it in a 529 plan first so you get the state tax deduction and then pay the tuition from the account.
- You can adjust your withholding to make sure you aren’t going to owe a bunch of money or give the government much of a 0% interest loan.
- If you are withholding too much, you could channel those funds to both further your goals AND decrease your taxes for this next year. If you were going to live without the money during the year, why not use it to fund something like a 401k or 529 plan that will help you achieve your goals AND get a bigger refund?
- If you are getting a refund, don’t let it slip into routine spending. Unplanned income is always a real gift, but lump sums can be especially helpful. Paying down a high-interest credit card, jumpstarting your curveball account for those variable expenses and surprises, or paying it forward for your retirement so you can take a vacation in the future are all great uses. If you aren’t sure what would best help your financial situation, contact your coach.
In our online classroom, we have lots of resources to help you with this challenge.
- Tax Organizer to prompt you for the information you need to gather no matter who is doing your taxes. (Courtesy of John McCarthy, CPA that offers a discount to our members.)
- Tax Savings Checklist is a resource that gives you a list of indicators to look out for. If one sounds like it might apply to you, read the potential strategies for lowering your taxes.
- Tax Strategies by Goals lets you look at the goals you want to accomplish and it tells you the tax strategies you can use to help accomplish them.
- Annual Limits lets you quickly look to see if you qualify for a specific credit or what tax bracket you would be in. (Courtesy of the College for Financial Planning.)
- 1040 Comparison is a simple Excel spreadsheet where you can enter this year’s numbers from your 1040 form and guestimate what those numbers will be this year.
- Tax Discussion Checklist, which lets you ponder taxes and your attitudes, and helps a partner, coach and tax advisor understand your situation.
- Links to websites such as withholding calculator, rules for dependents, etc.
- It’s a Taxing Time Class is available as a recording or PowerPoint and transcript.
Don’t just do your taxes. MANAGE your taxes!
It’s a privilege to pay taxes in America. We’re funding the National Forests, roads, bridges, the National Guard, our veterans, scientific and medical research and a bunch of other stuff we like. It’s a privilege. We just don’t want to be too privileged!
“Thanks pardner fer takin’ the time to ponder this.”