So, you got your tax refund! Happy? Should it be bigger? Do you want a larger refund next year? If so, then start prepping for that tax year 2017 refund now!
Actually, you should have started Jan 1st. With two-thirds of the calendar year left, you should be able to catch up with your planning.
In my opinion, tax planning is learning how to incorporate your financial lifestyle into the IRS code.
There are over 350 tax deductions and credits available. A tax deduction gets you your “tax bracket equivalent” back, while a tax credit gets you a dollar for dollar deduction.
For example, if you are single, making $40,000, living in NYC, you will be in a Federal and State tax bracket of 40 percent.
So taking advantage of a ” charity” deduction, you will receive 40 cents back off of every taxable dollar. Taking advantage of “college credits” gets you a dollar for dollar tax deduction. For instance, a $1000 gift to charity will result in a $400 tax savings, while $1000 in college credits gets you back $1000
Well, you can read the IRS manual
Good luck with that! It’s always changing !
But the best advice, as we suggest to our clients is, start learning and executing on lowering your tax liability now!
Ask yourself these questions:
Do I have medical expenses?
Did I pay New York state and city income taxes or property taxes?
Do I have a mortgage payment?
Did I get robbed?
Did I have any casualty losses in my home?
Did I donate money, clothing, or property to a church or a non for profit organization?
Do I have job expenses?
Did I have to pay for legal, financial adviser, tax preparation, banking or investment services?
Do I own a small business?
Do I receive Rental Income?
Did I adopt a child?
Am I eligible for the elderly care credit?
Am I putting enough money into my retirement plan at work to receive the ” retirement savings” credit?
Did I go to school?
Did I pay alimony or child support?
If you answered yes to just five of these questions, you are leaving money on the IRS table. SO LEARN HOW TO KEEP PROPER TRACK OF THESE LIFESTYLE DEDUCTIONS & CREDITS SO YOU CAN RECEIVE A BIGGER REFUND IN 2017
Start learning the things you need to minimize your tax liability and increasing your tax refund. Sit down with a Tax Advisor ( instead of a preparer) to do this properly.
As I always say, it’s like baking a cake. The chef ( preparer) just puts the cake in the oven to bake – but what makes the cake taste customized and delushious are the ingredients ( deductions & credits). And of course, we will all be sitting down soon to a NEW TRUMP LED Income Tax world which we believe will have a direct effect on 85-90% of Americans.
And if you still need help planning for a higher tax return next year? Feel free to call!!!