Now that you have more-than-likely filed your 2013 taxes, it is not too early to start thinking about tax strategies for the current year. Some simple steps may help in the overall tax-management by either reducing your tax bill or decreasing your refund so that you get more cash in each paycheck.
Increase withholding
You might pay a visit to your company’s HR department to discuss the tax withholding from your paycheck. The idea is to come as close to “break even” when filing your return. Thou it fun to receive a large refund, Uncle Sam does not give you any interest on the overpayment. You might be better served to control and invest those funds. And it certainly is NOT any fun to owe a large amount when you send in your 1040.
Raise your pension contributions
If you have a traditional IRA, 401k, 403B or other pension opportunity, consider contributing more money, if not already at the limit. This may reduce your taxable income as well as enhance your retirement picture. Know the caps and take advantage of employer matching offers.
Deduct your donations
Any time you make a donation of property, cash, or tithes you should document the transaction to boost your tax deductions. There are, however, some expenses that do not qualify for tax deductions, so you should check with a financial planner before making a significant donation.
Consult a professional
When you work with a financial planner or tax expert to file your return, you will have the highest chances of receiving a favorable refund. Tax professionals can help you identify deductions that you may not even know about, optimizing your potential for a big refund this year.
If you have not yet filed your taxes, get started with help from Financial Directions, LLC. You can reach us for a closer look at our services by visiting our website today or by giving us a call at 520-408-7777.
