Fall tax tips from IRS
COLUMBUS — Before holiday and year-end stress begins, the Internal Revenue Service (IRS) reminds taxpayers that now is a good time for a financial — specifically tax — review.
“Sure it’s important to organize your garage or shed to get ready for winter,” said Jennifer Jenkins, IRS spokesperson for Ohio. “It’s also important to organize your tax records so you’ll be ready for tax filing season, which will be here before you know it.”
The IRS suggests that taxpayers check their payroll tax withholding.
“Generally, it’s a good idea to try to have just the right amount of taxes withheld from your paycheck,” Jenkins said. “If too little is withheld, you’ll be writing the Treasury Department a check this spring. If too much is withheld, you’ll be due a refund because you’ve overpaid your taxes. If you want access to your money sooner rather than later, adjust now to help avoid over-withholding.”
Changes to income — taking a second job, having a spouse go back to work or receiving income not subject to withholding (rent, dividends, interest or capital gains) — can alter the amount that needs to be withheld.
“You’ll especially want to check your withholding if you’ve had personal or financial changes in your life that involve adding or losing an exemption. These life changes include marriage, divorce, birth or adoption of a child, purchase or sale of a new home, or retirement,” said Jenkins.
The “Withholding Calculator” on www.IRS.gov can help many taxpayers know if the right amount is being withheld from their pay. A current pay stub and a copy of last year’s tax form provide the data needed to make the withholding calculation. Taxpayers can use information from the automated calculator to revise W-4 forms for their employers.
Having up-to-date tax information can help taxpayers avoid problems at tax time. Tax law changes can impact eligibility requirements for tax credits and deductions.
“During the tax filing season and throughout the year, the IRS posts tax tips on topics of wide general interest. You can view existing tax tips and subscribe to receive new ones by email — just go to IRS.gov and search ‘Tax Tips’ for more information,” Jenkins said.
Keeping track of receipts and other records throughout the year also can help taxpayers avoid problems at tax time.
Taxpayers who itemize should keep receipts, invoices, mileage logs, canceled checks and other records to support deductions or credits claimed on tax returns.
“Now’s the time to find and file that paperwork, before it gets lost in the shuffle,” Jenkins said. “Without a receipt or canceled check to spark your memory, you may neglect to claim a deductible donation made to a tax-exempt charity, or you may miss out on a tax credit you are qualified to claim. Organization can help you capture all the tax savings you rate.”
Generally, tax records for individuals should be kept for three tax years, but some documents should be kept longer. Examples of records to keep longer include those that relate to a home purchase or sale, stock transactions, individual retirement accounts and business or rental property. For more information on what types of records to keep, search “Recordkeeping” at www.IRS.gov.
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