During the next 3 months, people will be scrambling to get their papers in order, so they can file their taxes before the deadline, which this year falls on Monday, April 18th. Here are 5 strategies that may help in preparing and possibly saving you some of your hard earned cash when filing.
- Getting your taxes filed early. The IRS begins accepting e-filed tax returns as early as January 19th. So if you file earlier, you will be getting your refund much sooner.
- E-File with direct deposit. E-filing and choosing direct deposit is the fastest way to ensure a quick refund. According to the IRS, using this method gets most tax payers their refund within 21 days or less.
- Organize for the tax season. Make a list of events of the past year, getting your receipts, expenses and other paperwork together will help expedite the process of preparing for your tax filing which could translate to a bigger return.
- Maximize your retirement. This time of year is a great time to maximize your contributions to your retirement accounts, your IRA’s and Roth IRA’s. For 401k’sand 403b’s in 2016 the contribution is up to $18,000 with an additional $6,000 if you are age 50 or over. To be eligible to begin this catchup contribution your 50th birthday needs to fall within anytime within the current tax year. If you have an IRA or are planning to get one before the deadline of April 18th, the maximum contribution is $5,500 ($6,500 if you are 50 or over). You may also be eligible for the savers credit of up to $1,000 ($2,000 for married couples).
- Check your W-4. If you have any expected changes coming in the new year such as a new job, a new addition to the family or a change in marital status, make sure you update your W-4 so you do not have too much or too little withheld from your paycheck.
Utilizing these smart tax saving strategies may help you save some money as we enter this tax season. As always, happy savings!