Tax moves to make during October 2014
Thursday, October 02, 2014
Welcome to October! Or as I like to call it, TaxtoberFest, a month-long celebration of ways to deal with taxes.
OK, maybe it's not as famous as the similarly named OktoberFest. But it could be much more lucrative if you make some smart tax moves to cut your taxes.
File by the 15th: The biggie is, of course, the filing extension deadline.
I'm serious all you procrastinators -- and I was one, too, until finishing our 2013 return yesterday -- the Internal Revenue Service will not let you go past Oct. 15.
So use the first half of this month to get that 1040 filled out and to Uncle Sam.
You'll need to track down all the tax documents required to file, such as W-2s, 1099s for contract payments or investment income and receipts for all your deductions. You can find details in this tax preparation checklist.
Filling in the forms: With documents in hand, check out these common tax filing mistakes so you don't make them. And definitely don't overlook any tax breaks that could reduce your final 2013 IRS bill.
Now just make sure you get your paper return's mailing envelope postmarked by Oct. 15 or hit "enter" by midnight if you e-file.
Remember, if your 2013 adjusted gross income was $58,000 or less, you still can use the IRS' Free File program.
Time for 2014 taxes: With 2013's taxes finally out of the way, it's time to focus full-time on your 2014 IRS bill.
One smart move to make is to adjust your payroll withholding. This is a good move regardless of whether you got a big refund or ended up with a big tax bill.
Giving your payroll office a new W-4 won't lower your tax bill, but it will mean that you won't have to scrape for money to pay it in April if you're not having enough taxes withheld.
And if your tax situation tends to go the other way, changing your withholding now could give you some extra cash each pay period to spend during this upcoming holiday season.
If you itemize, you might find that some tax years you don't have enough to clear the adjusted gross income percentage thresholds. This is 2 percent before your can deduct miscellaneous expenses or 10 percent hurdle for medical costs.
In these cases, implement a bunching strategy now to help track of expenses. That way you'll know whether you need to pull in, aka bunch, some things into one tax year so they'll get you a deduction.
Fight the tax fear: Finally, October is home to the scariest night of the year. Go ahead. Beware Halloween's goblins and ghouls.
But don't have to be afraid of taxes. There are plenty of easy ways to deal with any tax terrors you might have.
If you need or want some more October Tax Moves to make, check out the tax tips under that heading in the ol' blog's right column.
Hopefully you'll find some that will be worth toasting with your favorite Oktoberfest ale or other seasonal beer.
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