Perhaps you’re genuinely excited to do your taxes this year because you anticipate a hefty refund. Or maybe you’re financially overwhelmed and confused about your tax related challenges. In either case, these six battle-tested tips can help you regain financial control, save more money, and enjoy a more relaxed experience as you negotiate with Uncle Sam.
1. Contribute to your retirement accounts.
As the old Chinese proverb goes: the best time to plant a tree is 20 years ago. The second best time is now. Fund your retirement account to improve your chances of getting a refund and finance your future. If you haven’t already funded your retirement account for 2014, do so by April 15, 2015. That’s the deadline for when you can contribution to either a traditional IRA or a Roth IRA. However, if you have a Keogh or SEP, you can get a filing extension to October 15, 2015.
2. Make a last-minute estimated tax payment to avoid penalties.
Clear the slate by eliminating residual tax obligations held over from the previous year. IRS rules dictate that you must pay 100 percent of last year’s tax liability or 90 percent of this year’s tax, or you will owe an underpayment penalty.
3. Organize your records for tax time.
When confronting piles of receipts or perplexing and incomplete print outs from your Quickbooks, you may find yourself panicked and overwhelmed. Relax, but focus. Print out a tax checklist to help you track and gather all the tax documents you’ll need to complete your tax return. Collate all tax-related information that comes in the mail in January, such as W-2s, 1099s and mortgage interest statements. Be careful not to throw out any tax-related documents, even if they don’t look very important.
4. Itemize your tax deductions.
It’s easier to take the standard deduction, but you may save a bundle if you itemize, especially if you are self-employed, if you own a home or if you live in a high-tax area. When, precisely, is it worth the bother to opt out of the standard deduction? That tipping point happens when your qualified expenses add up to more than $6,200 for singles and more than $12,400 for married couples filing jointly.
5. Don’t shy away from taking a home office tax deduction.
If you have no fixed location for your business, you may be able to claim a home office deduction, as long as you use your space for administrative or management activities. You are entitled to write off expenses associated with the portion of your home where you exclusively conduct business. These could include rent, utilities, insurance and housekeeping.
6. Make an informed decision about whether to handle your taxes “DIY” or recruit qualified help.
Even if your financial situation is relatively simple, you may feel uncomfortable doing your taxes on your own. An experienced, qualified tax professional can help you avoid common mistakes, maximize your deductions and keep you feeling in control throughout the process.
For over four decades, the team at Whisman Giordano & Associates LLC has focused on building extraordinary relationships by working diligently and spending time getting to know our clients. Our focus is on providing peerless accounting, auditing, tax planning, compliance and business advisory services. We’d love to learn more about your tax situation and give you insight into what to do next.
Whisman Giordano & Associates LLC
Certified Public Accountants
111 Continental Drive, Suite 210
Newark, DE 19713
Phone: 302-266-0202
Fax: 302-266-7070
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