I am sure it feels like tax season just ended, but we are halfway through the year and now is the perfect time to do a bit of housekeeping. Ensuring that you are making the right decisions, payments and withholdings for your situation is crucial to a happy tax season next year.
Following are a few tax checkup things to do...
Review your healthcare status and if you used marketplace you should report changes in circumstances for:
Look at your 2015 refund and decide how you achieved these results and if you want to reach this situation again. The IRS reports that millions of American workers have far too much withheld from their pay. If this is your situation, determine if you are using this as a forced savings or just a misguided deduction.
Consider tax changes that may occur from 2015 to 2016. Review your tax return and make note of activities that are abnormal to your lifestyle that could affect your report this year. For example, a new water heater could make you eligible for an energy tax credit, but you can expect this result again. Another action might be stock sales and capital gains/loss.
Look for obvious lifestyle changes that will affect your status. Marriage, number of dependents, college, and home sales are all actions that will have an impact on your new bottom line. This life events will change your income drastically and are not something people generally want to be surprised with come April 15th. Generally, if you make more and spend less watch for a different bottom line.
If it feel like any of this is going to be your situation, it is time to contact your CPA and make some adjustments.