Tax Tips Offered
April 25, 2011 (Knight Ridder/Tribune Business News) No one wants to think about taxes following the April 18 deadline. But experts suggest that preparing now could make next year that much easier.
"Planning for taxes is just good financial strategy," said Michael Devine, an Internal Revenue Service spokesman. "If you had trouble this year, that should tell you that you need some sort of filing system."
Keeping track of receipts and any other tax records can be as simple as putting everything in a box, drawer or file folder. Anything that might possibly be a deduction should be placed in that spot throughout 2011 and questioned later.
From a marriage or divorce to moving expenses and new windows or appliances, all of these things could be important come tax season.
"There are more things you can do ahead of time than after the fact," said Charles Schwichtenberg, a certified public accountant with Sumner Carter Hardy & Schwichtenberg.
Mr. Schwichtenberg stresses the importance of communication with whoever is preparing your taxes. More often than not, those tax professionals can provide vital answers to questions about life changes or big purchases through the year.
"Just thinking occasionally about how this will affect your taxes next year might help you plan legally to reduce tax liability," Mr. Devine said.
Another idea to consider before next year deals with withholdings. According to the IRS, if an individual paid in more taxes than expected or received a large refund, he or she may want to complete a new Form W-4 withholding statement with their employer.
"If you only think about taxes in April, then you might miss out on the ability to save some money," Mr. Devine said.
There may be an alternative to record-keeping, too. Mr. Schwichtenberg said there are many applications for smart phones to keep track of mileage using the internal global positioning system, as well as an app to store pictures of receipts and working lunches.
"(Mileage) is something that we see people having a tendency to be lackadaisical about," he said. The apps can help with that. There are also apps to keep track of non-cash donations.
"The bottom line is that there are apps out there to keep record-keeping easier," he said. "I think as we go forward, we're going to see more of that."