With the April 15 filing deadline behind us, everyone is taking a collective sigh of relief…including your accountant! However, the time to start planning and taking advantage of tax credits and deductions for the 2015 tax year is now. Here are five steps you can take:
1) Stay organized. Set up a system and keep your tax records in a safe place. An easy way to do this is to set up a folder for each tax filing year where receipts and records can be put away and/or accessed all year long.
2) Take action when any life event occurs. Most life events can change the amount of tax you pay. Examples of life changes are change in marital status, birth of a child, retirement or the purchase of a home. When these life events occur, you may need to update the amount of tax you withhold from your paycheck. That can be done by filing a new Form W-4 with your employer. A call to your accountant can help you determine the best withholding status and number of exemptions you should claim.
3) Make sure to report any changes in circumstances to the Health Insurance Marketplace if you are enrolled. They may include increased or decreased income or changes to your family size. This will make sure you get the correct amount of assistance throughout the year.
4) Think about itemizing deductions. If you have claimed the standard deduction in the past, you might be able to lower your taxes if you itemize deductions on Schedule A. Itemized deductions include amounts you paid during the year for state and local income taxes, home mortgage interest, cash and non-cash charitable contributions, and even your tax preparation fees and investment management fees. Knowing whether you will itemize deductions or claim the standard deduction can help you plan when to pay these expenses throughout the year.
5) Now is a good time to review your satisfaction with your tax preparer. If you have any lingering questions or would like to suggest improvements, having that dialogue now could help you avoid headaches later.
A tax professional at Skoda Minotti can assist you with all of the planning items above. For more information on planning your 2015 taxes, call Jenna Staton, EA at 440-449-6800 in our Tax Planning and Preparation Department.