Springfield, IL (CAPITOL CITY NOW) – As tax filing season begins, there are many things we can do to help out our tax situation from last year or to even prepare for next year’s return.
Grabbing tax documents such as a W-2, gathering information from your previous return, and even collecting receipts for any personal or business write offs are among the things you should do to guarantee your best refund.
Brian Kearns, founder of Haddam Road Advisors, spoke on the WTAX Morning Newswatch about some of the crucial tax preparation steps, why you may see the numbers you see on your refund, and also gives some insights on Individual Retirement Accounts (IRA’s) and Required Minimum Distributions (RMD’s)
“The first thing you could do for your own peace of mind is pull out last year’s return, look at the different documents that you had, and try to make yourself some sort of a list of what you had last year and think to yourself ‘what changed in my life? Did I buy a house, did I sell a house, did my family increase or unfortunately decrease?’ what are the issues that you might have going forward that you need to address in the next 8 weeks.” Kearns said.
Most people likely would prefer to see a larger refund when thy file taxes, however, a large refund isn’t always a good thing.
“I would encourage people to think about it this way. Who would you rather loan money to? A friend, put the money into the market and earn some interest yourself, or would you rather loan money to the Federal Government. If you are getting a refund that’s what you have done. So, if you end up with a big refund come April 16th, where could you have put that to help somebody else out, or help yourself out,” Kearns stated. “Real tax planning is not revolutionary. It’s incremental. It’s all a series of small changes that you build up over time. and when you look back at it, say over a course of ten years, you think ‘Oh this move saved me that’ and it becomes a much larger number than you think.”
If you need to make a contribution into an IRA, or take care of your RMD’s, don’t forget also to get those distributions by the same filing deadline as your normal taxes, which this year falls on April 15, and according to Kearns, “There is still time.”
