By Doug Goldstrom
Now that we are a few months into 2012 and trying to keep all of our new year’s resolutions, if you made any, the last thing that we want to be reminded of are our tax returns that are due April 15. Now is the time to pull all those receipts and records together from 2011.
By January 31 all your tax records from your bank, employer, and investment companies must arrive to you. These records will be your w-2, 1099’s, and your 1098’s. Now that you have those tax records in hand you can start compiling your own records together like your charitable contributions, tuition expenses, and property taxes.
For a list of items that you can deduct if you itemize look at Schedule A. Actually 2/3’s of Americans do not itemize but rather take the standard deduction when they file their taxes.
If you have an AGI of $57,000 or less a year you can take advantage of “Free Filing”. Free Filing allows you to prepare and file your return for free online through one of the IRS’s tax software connections. To find out how go to the IRS website and type in “Free File” and follow the instructions listed. The best part of this service is it’s FREE, no need to buy the software at the store and no need to purchase it online plus when you e-file that service is also free.
What are some strategies that you can use to reduce your tax liability? Did you max out your contributions to your HSA? You still have time to do so for 2011. Did you max out your contributions to your IRA? You still have until the day you file to make those contributions. One benefit for a Roth IRA is if you are a first time home buyer you can use the money in your Roth IRA as a down payment and will not incur any tax penalties. The best time to look at reducing the taxes you owe for last year is not now so start planning towards 2012 today.