Summer’s almost here and you know what that means: warm weather, vacations, trips to the pool, oh, and working on your taxes!
While most of us think of tax season as the month or so leading up to Tax Day (April 15), it’s pretty smart to plan for your taxes all year long. So here are four things you can do over the summer to help improve your standing with the IRS when you file your 2017 taxes next year!
Take a Look at Your 401(k)
You already know you can make a pre-tax contribution of part of your cash wages to your 401(k) retirement plan at any time during the year. Why not now? When you defer your wages to your 401(k), they’re not subject to state or IRS tax withholding and aren’t reported on your Form 1040. And you can contribute up to $17,500 this year – or $23,000 if you’re 50 or older.
Some employers will even make a matching offer when you contribute to your 401(k). So go talk to someone in HR and start setting some funds aside for all the vacations you’ll take during your endless summer of retirement!
And Track Any Charitable Donations
Donations can get you a serious write-off on your taxes if you’re tracking them throughout the year. While it may seem like a lot to note every t-shirt and pair of shoes you drop off at GoodWill, doing so will get you a lot farther (and a lot more back) than just listing “a bag of clothing.”
When it comes to charitable donations, it’s much better to be the ant than the grasshopper!
Go Ahead and Pay Some Taxes
Are you self-employed? Have a side hustle? If so, you may be required
to pay estimated taxes to the IRS on a quarterly basis. If you are required to pay estimated taxes, this one is less of a suggestion and more of an IRS rule: make sure you’ve postmarked and mailed them to the IRS by June 15!
Review Your W-4 Withholding
The IRS hands back billions of dollars in tax refunds each year, which means a lot of taxpayers are having too much tax withheld from their paychecks. What amount is withheld is determined by how you completed your W-4 Form, which you can request and change at any time during the year.
Of course, if you adjust your W-4 now, this could mean a smaller refund than what you’re used to around tax time. BUT it can help put more money in your pocket paycheck-to-paycheck, which could help out during any travels you take this summer!
Be sure to stay tuned with ExpressTaxFilings for all your tax, IRS, and e-filing info! And have a safe and fun summer!