January was National Financial Wellness Month, so it only makes sense that as we inch closer towards April, we start evaluating our past year in order to make smart, attainable tax moves so you are better prepared for when it comes time to file your taxes. Starting the New Year can be difficult, especially if the holidays hit you hard. Here are some tax saving strategies to use help you save money in the New Year.
The early bird gets the worm. File your taxes early. Gather all your documents in one place early on, and go online to file your taxes. The earlier you file your taxes, the earlier you’ll receive your tax refund. Which we all want.
Don’t overpay to get someone else to file your taxes. Filing your taxes doesn’t have to be difficult, 4 out of 5 taxpayers do it themselves and save hundreds of dollars. In some cases, you may be able to file your federal and state taxes for free.
e-File with direct deposit. When you go online, you can e-file with direct deposit, which is the fastest way to get your tax refund. The IRS states that most taxpayers who e-file with direct deposit will receive their tax refund within 21 days or less.
Big life events such as getting married or having children are easy to remember, but what about all the little expenses that add up to bigger deductions? Don’t forget to have your receipts in hand for expenses related to your job search, day camp for the kids, charitable donations, medical expenses, and more when you sit down to file your taxes. These expenses may help you get a bigger tax refund.
Gather all your documents, forms, and receipts for tax- deductible expenses in one place throughout the year. This takes planning, but it’ll save you time in the long run. You won’t forget anything. Keep a folder or a binder by your desk or where you keep your mail. So when all those forms come in, you can easily keep them in one spot so you’re ready to go when the time comes.
Maximize your retirement, if you can’t then consider increasing the amount you contribute. It’s easy to get used to an increased salary deferral coming out of your paycheck when it’s building your nest egg and helping your tax situation
Taking above the line tax deductions- like moving expenses for a job, tuition and fees deduction and the educator expense deduction, can all reduce your taxable income and save you money at tax time. If you’ve purchased health insurance and received a premium tax credit, you may get even bigger premium tax credit when you file your taxes, if your taxable income is lower than expected
With the New Year, you may have a new job, new marital status or family member. If you are expecting changes in income or growing your family in 2016, you should double check and change the amount of withholding from your paycheck so you don’t have too much or too little withheld.