Plan Now for Next Year’s Taxes

Seven Great Ways to Be Ready for Next Year’s Tax Season.

Most people stop thinking about taxes after they file their tax return. But, there’s no better time to start tax planning than right now. And, it’s never too early to set up a smart record keeping system. Here are six tips to help you start to plan for next year’s taxes:

1. Take action when life changes occur. Some life events, like a change in marital status, the birth of a child or buying a home, can change the amount of taxes you owe. When these events occur during the year, you may need to change the amount of tax withheld from your pay. To do that, you’ll need to file a new Form W-4, Employee’s Withholding Allowance Certificate, with your employer. You can use the IRS Withholding Calculator to help you fill out the form.

2. Report changes in circumstances to the Health Insurance Marketplace. If you enroll in insurance coverage through the Health Insurance Marketplace for 2016 coverage, you should report changes in circumstances to the Marketplace when they happen. Report events such as changes in your income or family size. Doing so will help you avoid getting too much or too little financial assistance.

3. Keep records safe. Put your tax return and supporting records in a safe place with your other tax documents. That way, if you ever need to refer to your return, you’ll know where to find it. For example, you may need a copy of your return if you apply for a home loan or financial aid. You can also use it as a guide when you do next year’s tax return.

4. Stay organized. Make sure your family puts tax records in the same place throughout the year. This will avoid a search for misplaced records next year. Print and keep a copy of this year’s tax return and supporting records together in a safe place. This includes W-2 Forms, Forms 1099, bank records and records of your family’s health care insurance coverage. If you ever need your tax return or records, it will be easier for you to get them.

5. Shop for tax preparation services. If you are thinking about hiring a professional tax firm to help you with tax planning, start your search now. Choose a tax preparer wisely – you are responsible for the accuracy of your tax return no matter who prepares it. Find tips for choosing a preparer from Carpenter Evert.

Not sure if you need professional help? Take this short quiz to find out.

6. Think about itemizing. If you usually claim a standard deduction on your tax return, you may be able to lower your taxes if you itemize deductions instead. A donation to charity could mean some tax savings. See the instructions for Schedule A (Form 1040), Itemized Deductions, for a list of deductions.

7. Stay informed. Gather as much information as you can throughout the year, especially as tax and health care issues change. Subscribe to Carpenter Evert’s monthly newsletter to stay on top of the latest tax changes. The IRS also offers tips about tax law changes, how to save money and much more at IRS Tax Tips.

A little tax planning now can pay off big at tax time next year. Not sure where to start? Contact a Carpenter, Evert and Associates tax expert at(952) 831-0085 and we will point you in the right direction.

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