Important Questions to Ask Before Tax Season
G O
T H E
D I S TA N C E
W I T H
BY JOHN VEITH
Fall is a wonderful time of year. The leaves are changing, the air is crisp and we know winter hibernation is not far behind. It’s the time when the holidays will be celebrated with friends and family. Tax season seems so far away. Certainly this is not a time to be thinking about tax planning. Well ... maybe. As the end of the year approaches, it is easy to lose sight of your current tax situation. “I’ll worry about that after the New Year” is a popular theme. It may be easier and potentially less painful to think about it now than after Jan. 1. Here is a list of questions to ask yourself: How much am I withholding from each paycheck in federal and state taxes? You still have time to adjust if you are short. Do you have multiple W2s this year? If so, withholdings may be short. Consult your tax professional and get an estimate to ensure you are on track.
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Are you self-employed this year? Definitely get a year-end estimate if the answer is yes. Have you had life-changing events this year? Selling or purchasing a home, getting married, having a baby, divorcing or changing jobs are just some examples that may give you a surprise result come April 15. Do you have a brokerage account? What are your potential gains and losses for the year? These need to be addressed before Jan. 1 to minimize your tax burden. Are you looking for more tax deductions? If you are itemizing, charitable contributions are a wonderful thing for both taxes and society. Plan to make them before Jan 1. If you are older than 70 ½ by the end of the year and have IRA accounts, have you completed your RMD (required minimum distribution) requirement? If not, the penalties are substantial. Have you depleted your medical flex spending accounts? Have you met your maximum out-of-pocket expenses for health care? If so, you may want to see about getting other procedures taken care of before the end of the year before your deductible goes back to $0. Have you contributed enough to your company’s 401K plan? The maximum amount is $18,000 unless you are older than 50, then it jumps to $24,000. Proper tax planning can make completing your 2016 taxes a much smoother process with no surprises. No one likes a surprise from the IRS. Consult your tax professional before the end of the year and ask questions.
John Veith CPA, CMA, MBA is owner of North Georgia CPA, Inc., conveniently located across from Holly Springs City Hall. 770-924-4990. www.northgeorgiacpa.com AROUND CANTON | November 2016
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