Knowledge and Insights

Tips for a Stress-Free New Year

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Are you ready for tax time? There are a couple of steps you can take now, as information begins to arrive in the mail, to alleviate some of the stress of filing your tax return. Begin by putting together a folder with W-2s from your employer, 1099s for other income you may have earned, bank and other financial statements, and receipts for things like medical bills and charitable donations. Keep the folder near where you sort your mail or pay your bills.  Start a list identifying what you might be missing (using last year’s tax return or this year’s organizer as a guide maybe helpful).

A deduction that is easily overlooked is charitable donations. Many people make donations to charities whose work they support, but if you are planning to take a tax deduction for your gift, you must have the proper paperwork. Assembling the right documentation can also be tricky because the requirements vary based on whether the donation is cash and on the value of your gift. If you donate less than $250 in cash, for example, a canceled check, credit card statement or similar record may be sufficient, but if you give more, you will need a written acknowledgement from the charity. An additional tax form—and possibly an appraisal—may be needed for non-cash donations, depending on their value. Of course, the organization itself must also qualify as a charity under IRS rules.

If you volunteer for your favorite charity, you may want to keep track of the miles you drive, along with other out-of-pocket expenses.

We can offer advice that will make it possible for you to fund the causes you believe in and qualify for the deductions you deserve. We can also help you incorporate charitable giving into your long-term tax and estate planning.

Once you’ve gathered all your important paperwork, and completed the questions in your tax organizer, you may want to set up a meeting with us to talk about changes in your financial situation or in tax laws that may affect your return.

Having this discussion early is key to avoiding surprises at tax time.  This is a great time to get started on planning that can potentially minimize your tax bite and strengthen your financial situation.

For more information on tax-saving strategies, please contact me at (609) 689-9700 or