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Taxes 101: wrapping up 2016.

January just started and ’tis the season to start thinking about your taxes. We know it’s not always a pleasant subject but if you understand the basics, April 2017 will be a breeze.

All of us when we hear the word taxes

Before you get overwhelmed, don’t worry! Understanding taxes will help you save when filing.  Our tips will help you get ready for tax season:

The key to a relatively painless tax season is organization: gather all your  paperwork and receipts, and understand your payroll taxes and deductions. This way the moment you receive your W2 you’ll be ready to file.

Determine your income and be sure to include all taxable income you receive: do you work as a freelancer from time to time? Make sure that your income is included {and keep all your receipts from work-related purchases}

These are examples of things that you should keep:

  • Records of business or job hunting costs
  • Forms from your job showing income you’ve made
  • Purchases, sales, and improvements to real estate property
  • All actions in your investment and IRA accounts (Most online brokerages will keep these records for you.)

Get everything you can tax-free: certain things like your 401K, child care or commuter benefits are tax-free, take advantage of them and save on your overall taxes.

Understand what’s deductible and what isn’t: deductions can be a  beautiful thing if you figure out which ones apply to you, for example, medical and dental, charitable contributions, job, and educational expenses.

Did you do some good this season? You may deduct charitable contributions of money or property made to qualified organizations if you itemize your deductions. Generally, you may deduct up to 50 percent of your adjusted gross income but this varies.

How are you filing? Filing your taxes with your spouse? Or by yourself for the first time? It’s a daunting process, we recommend getting some guidance, tax software can be great when you have a relatively simple situation or you could go the traditional route and hire an accountant, the important thing is that you understand your tax situation and get help when needed

When in doubt, Ask A Lawyer  and make sure you take a look at our Tax Questions article on the legal help center.


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