Share:

Although tax season is over for most filers, getting a head start on your tax planning will help alleviate stress and maximize your savings. Taking some steps throughout the year will boost your applicable deductions and facilitate the process. Here are a few steps you can take now to set yourself up for an easier and more effective filing next year.

Tax Planning Strategies to Implement Now 

1. Adjust Your Withholding 

If you were taken aback by how much you owed the IRS this year, it’s time to make changes to your W-4. This is the form that instructs your employer how much tax to withhold from your paycheck. Increasing your withholdings will allow them to take out more money throughout the year so your tax bill is lower when you file. On the other hand, if your refund was substantially higher than you anticipated it to be, reduce your withholdings to receive more in each paycheck.

2. Contribute to Retirement Accounts 

tax planningHaving funds go directly from your paycheck to a 401(k) or Individual Retirement Account (IRA) account will not only help you reach your retirement goals, but also decrease your taxable income. As of 2019, people under 50 can contribute up to $6,000 in an IRA, while those 50 and over can put in up to $7,000. If contributing to a 401(k), the limit is $19,000 for individuals under 50 and $25,000 for anyone over that. In some cases, you may also take a deduction for any IRA contributions you make.

3. Keep Your Records Organized 

Throughout the year, gather all the financial records you use for tax planning and preparation. Keep them in an organized and accessible location, such as a box in your home office. This will prevent you from scrambling for documents and receipts at the last minute and simplify the process of determining your deductions. Remember to keep the previous year’s tax return, bank statements, W-2s, mileage logs, and expense and charity receipts, which you’ll need when April rolls around again.

 

If you need help staying on top of tax planning, call Engelson & Associates, Ltd in Holmen and La Crosse, WI. They will help make next year’s filing easier and ensure you’re taking advantage of all the ways to reduce your tax burden. Their team of experienced CPAs has extensive knowledge of the tax code and can guide you as you explore your credit and deduction options. They offer tax preparation for individuals and businesses. Visit their website to view their list of services, then call (608) 526-3437 to set up an appointment in Holmen and (608) 788-2181 for La Crosse.

tracking