June Tax Tips: What to Do Now That Tax Season Is Over
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Your life probably doesn’t revolve around taxes the way mine does. I’ll bet you spend time keeping up with friends and family, enjoying your hobbies, and taking trips—all without thinking about taxes.
No matter how full and wonderful your life is, though, taxes still manage to intrude. And if you simply ignore them, they will come back at you with a vengeance.
Keep these tax tips in mind throughout the year. You’ll be better prepared for next tax season, and you’ll also make better financial decisions.
Consult your tax professional before taking any major financial steps. Right before the 2013 tax-filing deadline, I had many people come to me with questions after they made major financial decisions, so it was too late to help them.
Some of them cashed out their IRAs, some of them sold a property in a short sale, others earned thousands of dollars from their online website without filing as a business—the list goes on and on. Ask your tax professional for help throughout the year and not just right before tax time.
Talk to your tax pro before you get married. Consider having the unromantic yet necessary tax and money talk with your fiancée before marriage, and get your tax pro involved. This can help ensure that you both start the marriage with open eyes and are able to deal head on with any tax, financial, or credit problems.
If you’re contemplating a divorce, include a tax professional in the discussion. Divorce attorneys may know a lot about family law, but they appear to know nothing about tax law. You should consult with your tax pro on issues such as who gets the tax benefits for the children each year and who gets which assets.
You may think you’re evenly splitting the money and assets, but some assets—such as stock, retirement accounts, IRAs and real estate—have heavy taxes associated with them when you sell them or cash them out. It’s important to understand the implications.
Have a business? Start your bookkeeping right away. The sooner you log your sales, mileage, travel, meals, and other expenses, the sooner you’ll know if you have to make changes to the way you do business. Are you undercharging clients or overpaying vendors? Is that why you’re always broke at the end of the year?
Also, be sure to set aside money for your estimated taxes so you don’t fall short when it’s time to pay.
Review last year’s tax return and the returns from the two years prior. Lots of people are coming to me with questions now about fixing errors from the past. Reading my column here at the Equifax Finance Blog, people are learning that they didn’t get benefits they could have. You can amend tax returns for up to three years after you file, so review your past returns now because there may be missed refunds coming your way.
Eva Rosenberg, EA is the publisher of TaxMama.com ®, where your tax questions are answered. She is the author of several books and ebooks, including Small Business Taxes Made Easy. Eva teaches a tax pro course at IRSExams.com and tax courses you might enjoy at http://www.cpelink.com/teamtaxmama.
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