As tempting as it is to ignore thinking about your taxes until tax filing season starts, there are good reasons to start now. With some strategic planning, you can lower your tax bill and minimize stress in the upcoming tax season. Here’s what we recommend doing now to help ease your load when January comes.
Find out where you currently stand
Even if you received a tax refund this year, there’s no guarantee that you’ll get one next year. Normal life events such as moving, tying the knot or getting a promotion can change your tax situation. Use a tax withholding calculator to determine whether you’re on the right path or if you need to make a quick U-turn. To get accurate results, you’ll need to have your most recent pay stubs and tax return handy. Depending on the outcome, you may need to update your W-4 information with your employer. The earlier you act, the more you can minimize the damage.
Determine which receipts are worth keeping
Have a bunch of receipts you’re holding onto “just in case”? Great news, your hoarding skills may pay off big time. Footing the bill for certain expenses can help lower your tax bill if you itemize your return. Deductible expenses include:
- medical and dental expenses
- state and local income tax
- real estate tax
- personal property taxes
- home mortgage interest or points
- charitable contributions
- casualty or theft loss
- non-reimbursed work expenses
- tax preparation fees
- gambling losses
Please note, itemizing is only beneficial if your allowable expenses are more than the standard deduction. For 2017, the standard deduction is $6,350. When you file with ezTaxReturn, we’ll automatically compare both figures. So you can easily see which option gives you the biggest savings.
Organize your records
There’s no point in holding onto things if you can’t find them when you need them. Once you have a good idea which receipts you want to save, create a special tax file and sort your receipts by category. This will ensure nothing gets misplaced and everything is readily available when it’s time to file. If you plan to store your records on a computer, be sure to back up your data on a cloud service like Dropbox or Google Drive, just in case. For added security, we suggest encrypting your files before uploading so no one can unlock them except for you. It also doesn’t hurt to enable two-step verification and set-up email
notifications on your account. This makes it harder for people to gain access and make changes without your knowledge.
Inform the Marketplace of any changes
Last year, nearly 13 million Americans were enrolled in a Healthcare Marketplace plan. Many of which receive a subsidy to make coverage more affordable. If you’re currently enrolled in a Marketplace plan, you must inform them whenever a major life event occurs so they can adjust your subsidy accordingly. This includes changes in income, marital status and family size. Don’t push it to the back burner because chances are you’ll forget and it will come back to bite you. Depending on your situation, you may miss out on additional savings or be forced to pay a portion back when you file your tax return. Participants can easily update their application by logging into their HealthCare.gov account or calling 1-800-318-2596 (TTY: 1-855-889-4325).
Pre-register for next year
With most of the year already in the books, tax time will be here before you know it. Pre-register now at www.ezTaxReturn.com and be the first to know opening day for the 2018 season. You’ll even get a special discount when you file. There’s no cost or obligation so sign up today.