What? I just finished my #$%& taxes, and you want me to plan for next year?!
It's fresh in your mind, and that's the best time to make adjustments to anything, especially your tax preparation. If you take some time now to make a few adjustments based on what you learned from 2013, it could make it a little less annoying.
What can you do now to prepare for 2014 taxes?
Reduce Your Taxes and Save for Retirement
Yep. You can kill two birds with one stone. If you have access at work to a 401(k) or other retirement plan, every dollar contributed reduces your taxable income. That's because the contributions are taken pre-tax, before you get your greedy little hands on it. This one step will reduce your taxes and strengthen your retirement. If you are contributing, increase your deferral. If your employer doesn't offer a retirement plan, then contribute to a Traditional IRA or Roth IRA. Do it now!
Adjust Your Withholding
For the life of me, I don't understand why people leave their withholding and receive thousands of dollars for a tax refund. Why not adjust that withholding and use those dollars to start or increase your retirement savings? If you ended up owing, then adjust your withholding to take out more from your paycheck. Ideally, you don't want to owe or get a big refund.
Get Organized Now
I'm a neat freak. I love everything in it's place, and my taxes are no different. Now is the time to set up an organized filing system whether that's paper based or electronic using filing services. The point is, start now. Start filing receipts in their appropriate categories. Keep a running total of these categories and their dollar amount deduction. If you do it throughout the course of the year, all you have to do is give it to your accountant, or add it up yourself. Saving you hours of headache when April 15th rolls around.
I know you just got your #$%& taxes done, but get started organizing now and you'll thank me later. I used to wait and add all this up at the last minute. Now I take a few seconds to a few minutes each week. It keeps me from freaking out looking for stuff and cursing the IRS and Uncle Sam.
If you liked this article, subscribe for free here! I'll have my virtual paperboy sling my article to your inbox every Friday.
The Morning Email helps you start your workday with everything you need to know: breaking news, entertainment and a dash of fun. Learn more