season has only just begun, and the last thing taxpayers
are probably thinking about is tax season. But anyone
hoping to position themselves well for an interesting
tax year should probably give it a little brainpower.
the last several years, Congress has given the taxpayers
and the tax community these little jolts. They are at
the point where they are making up tax laws for the year
that has passed," said Merry Brodie, an enrolled
agent with Atlanta-based Brodie Accounting Services,
which helps individuals and small businesses with tax
planning and filing.
taxes as a moving target, preparation is all about
planning. Here are some things Brodie says taxpayers can
do right now to get ready for what’s ahead and
possibly save money.
organized. Start gathering receipts and other items
needed to support your 2013 returns, Brodie said. Day
care receipts, health expenses and pay stubs all act as
supporting documents for your returns.
the past. Sit with your old tax returns and current pay
stubs and do an estimated tax return for 2013. If you
can’t do it yourself, spend about $50 to have a
professional do it for you, Brodie said. The objective
is to get an early idea of your tax liability so you can
make proper adjustments.
money to save money. "Everybody wants to save money
on taxes and it takes money to save money," Brodie
said. Actions such as increasing your 401(k) payments in
these next few months or allocating money next year to
medical reimbursement or dependent care accounts require
you to pay pre-tax money, but they also lower your
adjusted gross income, or AGI. The lower your AGI, the
less you owe the government. You may even be able to do
something as simple as adjust the withholding on your
last few paychecks of the year to help bring your tax
payments in line with your tax liability.
generous. Charitable donations can help you reduce taxes
owed as long as you itemize your return. But be warned:
A few $25 donations and a couple of Goodwill receipts
are probably not going to help you much, Brodie said.
the law and act accordingly. It helps to be aware of tax
law changes in any given year, Brodie said. In 2013, for
example, higher-income individuals — singles with
income of $200,000 or more or couples filing jointly
with income of $250,000 or more — will pay more taxes.
minimum for medical expense deductions for anyone under
65 increases from 7.5 percent to 10 percent of income,
which means fewer people will qualify. In addition, the
forgiveness debt on home foreclosures, sales tax
deduction, private mortgage insurance deduction, teacher’s
classroom supplies deduction, tuition and fees
deduction, and residential energy tax credit are only
good for 2013. Taking action in these areas before the
end of the year will put you in a position to take those
the power of three. There is nothing wrong with doing
your own taxes, Brodie said, but every three years it’s
a good idea to have an enrolled agent — a professional
qualified to represent taxpayers before the Internal
Revenue Service — complete or review your work. That
way, if you missed something, you will still have time
to file an amended return.