Personal Tax Review…Yes, It’s Time For One!
It is easy not to worry about your personal income tax until January 1 of the next year…or better yet, maybe April 15! However, not so fast… There are many GREAT reasons to conduct a personal tax review RIGHT now! This is not as daunting as it may sound. I simply mean, review your income, deductions and assess your expectations for owing or paying in taxes for the 2016 year.
Gathering The Information – Personal Tax Review
All of the information you need to review your personal income tax is easy to come by. I recommend gathering the following items:
- Last year’s tax return
- Your current pay stub
- Your spouse’s pay stubs (if applicable)
- Any records of rental properties
- Donation receipts for the current year
The Actual Assessment – Personal Tax Review
There are many ways to do this, but I will tell you about the way I do it. I have a simple spreadsheet in my computer that has spots for me to fill in my projected income and the projected taxed paid. Then in another column I denote my projected deductions from mortgage interest, donations, union dues etc…(these will be different based on your situation).
I use my tax return from last year as my equation, because it shows me just how these numbers work together. If your situation is similar to years past (a similar income and similar deductions) then this is easy. However, in my home, our income changes from year to year and so has our situation. We have sold two homes and bought another one. Changes and fluctuations like this really effect our tax picture.
Reducing Your Tax Burden – Personal Tax Review
Isn’t this what everyone wants to do? There are many great ways to reduce your tax burden, and we know what all of them are! Some of these things include contributions to retirement accounts, changing your exemptions, or donating goods.
Our team at Numerico would love to answer any tax questions that you have. We are updated on all of the current tax laws and are here to help you. Many people view taxes as an afterthought, but we know what an impact preparation and good expectations have come next year. As usual, a little preparation can go a long way!
