Now that you have this year's taxes out of the way, it's time to get a jump on April 15, 2014.
1. Keep personal information organized.
Were you scrambling to find your kid's Social Security number? Did you forget your spouse's birth date? Tracking down this information just adds more time to an already time-consuming process. Pick a safe spot to store all the info you need. Consider a fireproof and waterproof safe that's large enough to store important letter-sized documents.
2. Go digital. If you'd rather go paperless, there are apps for that likeDocVault. It lets you save 3GB worth of encrypted pictures and tax-related material like receipts and invoices, and allows you to add notes and tags to the photos for easy organization on DocVault's servers. Come tax time, you have the option of transferring those images directly to filing services TaxAct Deluxe or TaxAct Preparer's Enterprise.
Receipt Catcher is an app that lets you take a photo of a receipt, tag it with info, and then email it to yourself. When you're ready, you can print out a year's worth of receipts in a few clicks. The app costs 99 cents and is available for both Android and iPhone.
3. Start thinking about tax breaks.
Before you file those papers away, review which deductions and credits you qualified for in 2012 and determine which ones you'll be able to use this year. For example:
4. Review your documents.
Use your 2012 return to spot where you can and should save more money this year. For example:
5. Don't withhold too much.
Uncle Sam loves getting interest-free loans, and many taxpayers make it possible by overpaying their taxes. Last year, the average tax refund was $2,803. But there are ways to keep that money in your pocket. We have tips, like using the IRS' withholding calculator.
Take a few minutes to research what changes are in store for this year. Will the deductions and credits you used for 2012 be around for 2013? Are new deductions available? The more you know now, the easier it will be to minimize your tax liability.
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