If you are like most Americans, once you get your tax refund in hand, you may exhale a sigh of relief, and have a moment of gratitude knowing that you won’t need to think about your taxes again until next Spring. While the idea of finally crossing your taxes off your to-do list may be liberating, tax experts like Optima Tax Relief recommend taking a different approach. Keeping tabs on your taxes year-round may not sound like the most fun, but the rewards of some simple proactive pre-tax season planning can go a long way to make sure you aren’t leaving any cash on the table come April. Managing your tax credits and deductions year-round can also make filing your taxes much easier come tax time.
While it may seem daunting to take the time to understand how tax credits and deductions can impact your taxes, it can be well worth it to manage them over the course of the year. With the roll out of the Tax Cuts and Job Act, many taxpayers may find themselves in a better position by opting for the standard deduction over itemized deductions. Remember that if your itemized deductions are greater than your standard deductions, it makes sense for you to continue to track your itemized expenses over the course of the year.
If you plan on taking a tax credit this year, you will have to keep records and documentation for the entirety of the year to prove your eligibility. You can even check now to see if you will qualify during the next tax season. If you are a parent, a family with students, or a low to moderate income household, you may find that you are eligible for these tax credits.
The IRS provides an Interactive Tax Assessment tool to help you determine what credits and deductions you may qualify for. Optima Tax Relief recommends reaching out to a tax professional now to make navigating these tax law changes easy and painless – and ensure you are boosting your refund come April.