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This is the best time of the year to start preparing for your 2013 tax return. The new 2013 tax laws have already been signed in to law, you already know which problems that you had in preparing your 2012 tax return, and by starting now you can avoid going through the same agony in 2014. You should also avoid using the Scarlett O’Hara approach from “Gone With The Wind” – “Tomorrow’s another day!”  You could also think about the old adage – “Bad medicine is best when taken in small doses!”
The United States uses a pay-as-you-go approach for your annual tax liability. You are expected to have on deposit with the U.S. Treasury one fourth of your annual income tax liability each quarter. This requirement can be fulfilled using several methods such as payroll withholding, quarterly estimated tax payments, backup withholding etc.Â
Organizing your records throughout the year is always important. Having your tax return records easily accessible after December 31st will diminish your stress and reduce the time required to assemble these important documents.
Perhaps this is the time to begin using a tax professional to assist you in the preparation of your tax returns and to advise you regarding opportunities to reduce your tax liability. The U.S. Congress has succeeded in passing income tax laws that are more difficult to comprehend and require an extensive degree of technical knowledge. You should ask the tax preparer for an estimate of the cost for the preparation of your 2012 tax return. Then divide the estimated cost by the total actual number of hours which you spent accumulating records, extracting data, and preparing your tax return.   What was your conclusion?
If you will be changing your marital status in 2013, contact a CPA or tax attorney as soon as possible. The Internal Revenue Service tests your marital (filing) status as of December 31st every year. This is especially important if you plan to be divorced, marry, or separate. Your final divorce decree or separation agreement does not supersede the provisions of the income tax laws! If you are living in a “community property state” this task is even more important. Additional information can be obtained from IRS Publication 504 (“Divorced or Separated Individuals”) or using this link: http://www.irs.gov/publications/p504/index.htmlÂ
Tips to Start Planning Next Year’s Tax Return
For most taxpayers, the tax deadline has passed. But planning for next year can start now. The IRS reminds taxpayers that being organized and planning ahead can save time and money in 2014. Here are six things you can do now to make next April 15 easier.
1.  Adjust your withholding. Each year, millions of American workers have far more taxes withheld from their pay than is required. Now is a good time to review your withholding 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 you 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 at IRS.gov to complete a new Form W-4, Employee’s Withholding Allowance Certificate.
2.  Store your return in a safe place. Put your 2012 tax return and supporting documents somewhere safe. If you need to refer to your return in the future, you’ll know where to find it. For example, you may need a copy of your return when applying for a home loan or financial aid. You can also use it as a helpful guide for next year’s return.
3.  Organize your records. Establish one location where everyone in your household can put tax-related records during the year. This will avoid a scramble for misplaced mileage logs or charity receipts come tax time.
4.  Shop for a tax professional. If you use a tax professional to help you with tax planning, start your search now. You’ll have more time when you’re not up against a deadline or anxious to receive your tax refund. Choose a tax professional wisely. You’re ultimately responsible for the accuracy of your own return regardless of who prepares it. Find tips for choosing a preparer at IRS.gov.
5.  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 equal some tax savings. See the Schedule A, Itemized Deductions, instructions for the list of items you can deduct. Planning an approach now that works best for you can pay off at tax time next year.
6. Keep up with changes. Find out about tax law changes, helpful tips and IRS announcements all year by subscribing to IRS Tax Tips through IRS.gov or IRS2Go, the mobile app from the IRS. The IRS issues tips regularly during the summer and tax filing season.
You can find forms and publications at IRS.gov or order them by calling 800-TAX-FORM (800-829-3676).
Additional IRS Resources:
- IRS Withholding Calculatortool
- Form W-4, Employee’s Withholding Allowance Certificate
- Publication 505, Tax Withholding and Estimated Tax
- Publication 552, Recordkeeping for Individuals
- Choosing a Tax Professional
- Schedule A, Itemized Deductions and instructions
IRS YouTube Videos:
- IRS Withholding Calculator – English | Spanish | ASL
- IRS2Go 3.0 – English | Spanish
- Record Keeping – English | Spanish | ASL
- Standard Versus Itemized Deductions – English | Spanish | ASL
IRS Podcasts: