For many, a new year brings resolutions aimed at increasing our health and well-being. One area of our lives many of us overlook is our tax situation. If this is you, we have identified a few worthwhile resolutions to adopt.
Keep Better Records. IRS regulations require taxpayers to keep adequate books and records in order to properly substantiate items on a tax return. A few examples include the amount of charitable contributions made, amounts paid for medical expenses, business records, and mileage logs for business, medical, and charity purposes. With better records, it becomes easier at the end of the year to locate and total these amounts, which can be kept in a file folder as well as a mileage log.
IRS Notices. Receiving a notice from the IRS can be unnerving. However, by acting quickly and contacting our office to represent you, you can rest assured the issue is being taken care of properly. Notices are very time sensitive and could bring further financial penalties if not acted upon quickly.
Talk To Your CPA. Don't let talking to the "tax man" be a bad experience. By communicating with us throughout the year, we can discuss various tax planning strategies to minimize the amount you will owe the following year. Mid-year tax planning can help avoid surprises and penalties come April.
Be Aware of Identity Theft. Unfortunately, in today's society, there are many ways one can become exposed to identity theft. However, if affected, it is important to contact the proper authorities immediately. There are proper avenues to take in order to handle the situation and remedy the breach. Income tax fraud is a relatively new way criminals are targeting individuals. We can help alert the IRS if you think you are at risk.
Don't Time the Market. Many times, contributing to tax deferred savings accounts comes at the end of the year or when we think the market is "right". However, many studies show contributing to these accounts consistently throughout the year is a better strategy. Regular periodic contributions will likely be easier to budget than trying to come up with a large amount at the end of the year. You are also likely to see greater returns on your investments using a methodical strategy rather than trying to time the market.
Understand Your Insurance. A recent survey found less than half of individuals polled could define common insurance policy related terms. Knowing the meaning of terms such as copay, coinsurance and deductible are important to understanding your policy benefits. It will also help you better understand how to use a tax advantaged health savings account.
This year, determine to be part of the group of people who keeps resolutions. Not only will you have something to brag about, but you may also save money in the process.