As 2013 draws to a close, many people are worried about buying last-minute Christmas gifts or maybe putting together fun New Year's Eve plans. However, they should be thinking more about their finances than they probably are.
When the clock strikes 12 on New Year's Eve, there will be no going back to "fix" mistakes. And these mistakes can be costly!
The Chief Tax Officer, Mark Steber, at Jackson Hewitt Tax Service Inc.put together a list of five things that everyone should do before December 31.
Check it out:
1) Review any life changes.
If 2013 was a year that a new marriage started, a baby was born, or a house was bought, all those things could trigger tax credits or deductions. Also, taking care of an aging parent or having an adult child move back in could affect one's taxes as well. Putting together a to-do list and action item timeline can help anyone get focused on getting money smart.
2) Think about year-end tax moves.
Many people may not know that smart money moves, like pre-paying January's mortgage, increasing the contribution to a retirement account, or upping one's charity gifts, could reduce one's taxable income. Be money smart and think about it now!
3) Embrace tax technology.
There are now many, many ways to help anyone prepare their taxes in an easy, simple, low-stress way. Over 100 million people e-filed their taxes in 2012, using technology to prepare their taxes faster and easier, and get their refund quicker.
Tax service websites like HR Block and JacksonHewitt.com can help keep one organized, find deductions and credits, locate a local preparer, and track the status of a return. They take the guesswork out of tax preparation!
4) Create a plan.
Work with a local tax preparer on a plan that includes the things which need to be done to get one's taxes done. Maybe this means to start a file for all the tax documents lying around, simply reviewing the life changes that happened this year, or even just putting a target date on the calendar when you plan to file. And please, save the stress and file BEFORE April 15. (Though according to TLC, 94.76% of Americans wait until April 15 to file their taxes.)
5) Find last year's tax return.
Locate the tax return copy from 2012 along with any other tax information which was kept. Reviewing last year is a great way to prep for this year!
The bottom line is to just start thinking ahead. Being mindful now of one's tax situation could be worth considerable financial consideration come tax time. Getting money smart about tax preparation will surely reap rewards!
Sources:
Huffingtonpost.com. Web. Published 13 December 2013. "15 things to know, to do and to watch for as 2013 draws to a close."
http://www.huffingtonpost.com/mark-steber/15-things-to-know-to-do-a_b_4266728.html
TLC. Howstuffworks.com. Web. 18 December 2013. "5 things to do before December 31".
http://tlc.howstuffworks.com/family/5-things-to-do-before-december.htm
Reviewed December 19, 2013
by Michele Blacksberg RN
Edited by Jody Smith