Mid YearTax Tips
Mid-year is a good time to double check where you are in the world of tax liability. Here are some tips that might help you make the most of your dollar.
Check your witholding rate. If you got a large return last year, your witholding is too high. Remember: the IRS does not pay interest on your money. And while you’re at it, check your deductions. Are you accounting for everything? Are there some deductions left over from last year that you can claim this year?
How good is your record keeping? Having your records in good order will make life easier for you over the next six months. You can use a W-4 form and worksheet for these calculations.
If your type of income has changed significantly, for instance, if you’ve become self employed, you may want to consider making quarterly estimated tax payments. This would eliminate a single, large tax liability January 1st.
If all this seems a little overwhelming – you are not alone. Over 50% of individual taxpayers hire a tax professional. But, remember, they can’t do all the work. Orderly and accurate record keeping is your job – and it will save you money in the long run.