In my last blog post , I gave various tips on how small business owners can complete a small business . But small business owners are not the only ones who need help, you do too! For those who work for someone else, it actually makes sense to check your financial “plus” at least twice a year. Before I started my business, I would check to see if my withholdings are in line with what my actual earnings were.
You can save time and money by being organized and planning before the 2014 tax season — you might even reduce your stress. Here are some things you can do now to make next year easier.
Organize your records – Buy a binder or larger file folder where everyone in your household can put tax-related records during the year. Anything other than a shoebox is fine! This will avoid a scramble for misplaced mileage logs or charity receipts during tax time. Put your 2012 tax return and supporting documents somewhere safe, so you’ll know where to find it in the future. You may need a copy of your return when applying for a home loan or financial aid. It can also be a helpful guide for completing next year's return.
Update your budget- Did you make a new year’s resolution to spend less or make more? Now would be a great time to sit down and “check in” with yourself (and your family) to see if financial goals have been achieved. If you didn’t make a budget, now is the greatest time to start. For tips on create a budget, use one of the great links on my website.
Check your withholding – Each year, millions of workers have far more taxes withheld from their pay than what is required. To make sure this doesn’t happen to you, review your withholding and adjust it to make the taxes withheld from your pay closer to the taxes you’ll owe for this year. This is especially true if you normally get a large refund and would like more money in your paycheck.
If you owed tax when you filed, you may need to increase the federal income tax withheld from your wages. Use the IRS Withholding Calculator to calculate the proper withholding.
Consider itemizing deductions – If you usually claim a standard deduction, you may be able to reduce your taxes if you itemize deductions instead. If your itemized deductions typically fall just below your standard deduction, you can bundle your deductions. For example, an early or extra mortgage payment or property tax payment or a planned donation to charity could mean tax savings for you.
Start planning today and it pay off at tax time next year.
If you are still not ready to do the check-up at full steam or you are unsure of how to proceed, get it touch with me. I am here to help!
Jéneen R. Perkins is a freelance accountant and consultant serving entrepreneurs, families and small businesses. She prides herself in being fluent in English instead of “Accountant-ese”.
"Putting My Money Where My Mouth Is" is a journal about real life experiences and answers to tough tax questions posed to Jéneen R. Perkins, Owner of Eclat Enterprises, LLC