Tips To Start Planning For Next Year’s Tax Returns

By Author: Alice Coope
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Tax planning is a fundamental part of wealth management and what is a matter most is after tax returns. It’s never a good idea to tackle investment planning without tax planning or vice versa as the two is inextricably linked and your adviser should provide both investment and tax expertise.

You many missed out the tax deadlines this year, but it's time to start effectively planning for the following year. Being organized and planning ahead can save time, money and difficulties in the coming year. These tips can make tax planning for the next year simple.

* Review and regulate your withholding

If you’d prefer more money in each paycheck this year, now is a good time to review your withholding and make adjustments for next year.

* Sort out your record keeping

Be consistent and establish a central location where tax-related records can be preserved all year long. Prevent a rush for misplaced mileage logs and charity receipts during tax time.

* Examine your paycheck

Correcting a mistake ...
... in your paycheck can get you back on track before it develops into a big problem. It is a good idea to ensure that your employer has appropriately withheld and reporting health insurance payments, charitable payroll deductions, etc. As these payroll adjustments can make a big difference.

* Decide on a tax professional

A tax professional helps strategize, plan and make financial decisions. Decide on a tax professional so that there is more time against a deadline. It is important to choose a tax planner wisely as you are eventually liable for the correctness of your own return no matter who prepares it.

* Plan to itemize deductions

An early or extra mortgage payment, pre-deadline property tax payments, planned donations or strategically paid medical bills could amount to some tax savings. A bit of calculating tax planning can pay off in case your expenses descend below the amount to make itemizing advantageous.

* Manage education payments

As the American Opportunity Tax Credit, that offsets higher education expenses, are set to expire after 2012, it may be beneficial to pay 2013 tuition in 2012 to take full advantage of this tax credit, up to $2,500, prior to it expiring.

Keep abreast with the tax law changes, helpful tips and IRS announcements all year. Think about your particular circumstances and goals before making large financial decisions and partner with a reputed tax expert to get the best benefits

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