Tax Time 2012
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Even though 2012 is already here, it's not too late to reduce your tax bill. Though it's true that most money-saving options to defer income or accelerate deductions become much more limited after Dec. 31, there is still plenty you can do to make the tax-filing season a little easier on your wallet. Here are some tips that will help lower your blood pressure while keeping more of your money in your pocket: 1. Contribute to retirement accounts If you haven't already funded your retirement account for 2011, you still have some time. April 17, 2012, is the deadline for contributions to a traditional or Roth IRA. However, if you have a SEP, you can file an extension to Oct. 15, 2012, which will let you wait until then to put 2011 contributions into those accounts. However, to start tax-free compounding as quickly as possible, don't dawdle in making contributions. 2. Organize your records Good organization may not cut your taxes, but there are other rewards; and some of them are financial. For many, the biggest hassle at tax time is getting all of the documentation together. This includes last year's tax return, this year's W-2s and 1099s, receipts and so on. Ask your tax preparer for a tax organizer, or tax checklist to help you gather the documents needed to prepare your return. Keep all the tax information that comes in the mail in January, such as W-2s, 1099s and mortgage interest statements. Be careful not to throw out any tax-related documents, even if they don't look very important. It's easier to deal with extra information then missing information. Collect receipts and information that you have piled up during the year. Also, make sure you know the price you paid for any stocks or funds you may have sold. If you don't, call your broker before you start to prepare your tax return. You should also ask your local pharmacy to print out an itemized list of your medication purchased during the year. Having this type of information at your fingertips will save you another trip through your files. 3. File and pay on time If you can't finish your return on time, at least make sure you file Form 4868 by April 16, 2012. This Form gives you a six-month extension of the filing deadline until Oct. 15, 2012. On the form, you'll need to make a reasonable estimate of your tax liability for 2011 and pay any balance due with your request. 4. Consider direct deposit Elect to have your refund directly deposited into your bank account. You'll receive it faster than a paper check in the mail. 5. Choose your preparer carefully Many people look for help from professionals when it's time to file their tax return. According to the IRS, choosing a tax preparer is not a decision to be taken lightly. Regardless of who prepares your tax return, you, the taxpayer are the one responsible for everything on it. Therefore, it's very important to choose your tax preparer carefully. Also, make sure the tax preparer is accessible. You should be able to contact the tax preparer after the return has been filed, even after the April due date, in case questions arise. Hopefully these tips have been helpful. Here's to a "stress-free" tax filing season! TAX TIME • TAX TIME • TAX TIME COMMUNITY VOICES: ‘Stress-free’ tax filing By Derek Varao • The Tax Consultants
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Tax Time 2012
Transcript of Tax Time 2012
Even though 2012 is already here, it's not too late to reduce your tax bill. Though it's true that most money-saving options to defer income or accelerate deductions become much more limited after Dec. 31, there is still plenty you can do to make the tax-filing season a little easier on your wallet.Here are some tips that will help lower your blood pressure while keeping more of your money in your pocket:1. Contribute to retirement accountsIf you haven't already funded your retirement account for 2011, you still have some time. April 17, 2012, is the deadline for contributions to a traditional or Roth IRA. However, if you have a SEP, you can file an extension to Oct. 15, 2012, which will let you wait until then to put 2011 contributions into those accounts. However, to start tax-free compounding as quickly as possible, don't dawdle in making contributions.2. Organize your recordsGood organization may not cut your taxes, but there are other rewards; and some of them are financial. For many, the biggest hassle at tax time is getting all of the documentation
together. This includes last year's tax return, this year's W-2s and 1099s, receipts and so on. Ask your tax preparer for a tax organizer, or tax checklist to help you gather the documents needed to prepare your return.Keep all the tax information that comes in the mail in January, such as W-2s, 1099s and mortgage interest statements. Be careful not to throw out any tax-related documents, even if they don't look very important. It's easier to deal with extra information then missing information.Collect receipts and information that you have piled up during the year. Also, make sure you know the price you paid for any stocks or funds you may have sold. If you don't, call your broker before you start to prepare your tax return. You should also ask your local pharmacy to print out an itemized list of your medication purchased during the year. Having this type of information at your fingertips will save you another trip through your files.3. File and pay on timeIf you can't finish your return on time, at least make sure you file Form 4868 by April 16, 2012. This Form gives you a six-month
extension of the filing deadline until Oct. 15, 2012. On the form, you'll need to make a reasonable estimate of your tax liability for 2011 and pay any balance due with your request.4. Consider direct depositElect to have your refund directly deposited into your bank account. You'll receive it faster than a paper check in the mail.5. Choose your preparer carefullyMany people look for help from professionals when it's time to file their tax return. According to the IRS, choosing a tax preparer is not a decision to be taken lightly. Regardless of who prepares your tax return, you, the taxpayer are the one responsible for everything on it. Therefore, it's very important to choose your tax preparer carefully.Also, make sure the tax preparer is accessible. You should be able to contact the tax preparer after the return has been filed, even after the April due date, in case questions arise.Hopefully these tips have been helpful. Here's to a "stress-free" tax filing season!
TAX TIME • TAX TIME • TAX TIMECOMMUNITY VOICES: ‘Stress-free’ tax filing
By Derek Varao • The Tax Consultants
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