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Tax season finally ended, with millions of tax stragglers getting their 2013 returns into the Internal Revenue Service by the Oct. 15 extension deadline.
Now it’s time to think about 2014 taxes. Here are some info from our friends at Bank Rate.
Sorry. I know you’d like to not think about taxes for a while. But if you snooze, you lose when it comes to taxes.
Tax questions to ask now
Taxes, like other financial planning efforts, require a strategy. The best starting point in any of these plans is where you are now.
Look at your recently filed Form 1040 to find out what you did (or didn’t do) this year. It will offer guidance on what you should do for the 2014 tax year.
What was your 2013 taxable income? Do you expect it to be about the same this year? Does it look like you might be moving into a higher tax bracket? If so, now is the time to look into the possibility of deferring income.
Were you surprised, pleasantly or otherwise, by your tax bill? Did your income level cause you to lose some of your personal exemption amounts and itemized deductions? Did you have to pay the 3.8 percent net investment income tax or 0.9 percent added Medicare surcharge?
Get help now
The tax code is increasingly complex, said Stolz, which is why it is critical to analyze how it affects you. “If you’re comfortable doing these types of analyses yourself, keep doing that,” said Stolz. Bankrate’s tax guide and Tax Adviser can help you answer many of your tax questions.
But if you need more direct, personal help, get it.
“Accelerating this, slowing down that, you might want to work with someone,” Stolz said. “Tax planning is like a clown’s long balloon. When you squeeze one area, it goes up in another.”
And it’s better to seek professional tax advice now, when changes can be made by year’s end, rather than trying to deal with a misshapen tax balloon once 2015 arrives.
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