Whether you are waiting to file your taxes or already got your refund back, you should already be thinking about what you can do to maximize next year’s return. If you didn’t get back as much as you wanted, or worse, you owed money to the IRS, you have a chance to change that outcome for next year. The CGS Team is sharing 6 things to start doing now to maximize next year’s tax return and hopefully get a larger refund!
Adjust Your Withholding
While it’s great to get a large refund back after filing your taxes, it ultimately means you have been loaning the IRS money (interest-free) for the past year. What could you have done with that extra money had it been in your paycheck? Pay off debts, put it in savings and let it grow with interest, perhaps?
Evaluate Your Retirement Contributions
If you’ve been saving money throughout the year, paying down your debts, and have been good with your spending, consider contributing more to your retirement plans. If you are contributing to a traditional IRA, your tax-deferred contribution limit is $5,500. If you are contributing to a traditional 401k plan, your tax-deferred contribution limit is $18,000. This is a great way to reduce your total taxable income for 2017.
Take Those Classes You’ve Been Putting Off
Thanks to the Lifelong Learn Credit, people who spend their time and money taking classes at a two-year or four-year university may be able to receive a credit up to $2,000 on their return. If you’ve been putting off taking classes, that may help ease the financial burden.
Keep Your Accounts Separate
If you have a bad habit of mixing your business and personal expenses, start the year off by opening a separate account for your business. Keeping those finances separate can make it easier to identify and organize business expenses when filing a tax return, plus you can see where your business stands throughout the year.
Track Your Miles
If you typically itemize your deductions, or plan to in 2017, start tracking your miles to any work, volunteer or medical activity. Even short trips to the pharmacy to pick up a prescription or to a local Goodwill or Salvation Army to drop off donations can add up to a decent tax deduction throughout the year.
Keep All of Your Receipts
There’s nothing worse than trying to remember the details of a purchase from last year to help your tax return situation. Instead of putting yourself through that stress, make it a point to keep all of your receipts this year. If you’re looking for a job or moving for work, keep copies of everything down to the cost of paper your resume is printed on. These expenses can help lower your overall taxable income amount.
Related: Tackling Taxes with Confidence with Duke Moore
We’re only a month into the year, so it’s not too late to get organized and do the right thing for your next tax filing season! How do you stay organized with your receipts and expenses throughout the year? Post a comment below to share your thoughts!
1 thought on “6 Things to Do Now for Next Year’s Tax Return”
Good Morning Ladies! @sabina-gronski @bmarierodgers @cgonsewski @danielle-proulx @anna4915 @forkerms @peggy Have you read the new article “6 Things to Do Now for Next Year’s Tax Return”? We’re sharing a few things to start doing to make next year’s tax season a simple one! Do you have any tips for a smooth tax return process?