Tax Tips

Get your IRS tax refund fast!!!

The IRS can deposit your tax refund directly into your checking or savings account.  It is the FASTest way to get your refund and it’s FREE, and SAFE.  There’s no check to mail out or get lost or stolen.  The IRS sends out direct deposits earlier than they mail out paper checks.  On average, you can get your direct deposit refund 7 days before you would get a check in the mail.

And, you can split your refund with direct deposits into two or three checking or savings accounts.  It’s easy, just use IRS Form 8888, Direct Deposit of Refund to More Than One Account.  If you are interested in this option, just let us know when we are preparing your tax return.

Maximize benefits that generate "above-the-line" deductions. Above-the-line deductions are those expenses you can subtract from your income in determining your adjusted gross income (AGI). Traditional Individual Retirement Account (IRA) and Health Savings Account (HSA) contributions, moving expenses, self-employed health insurance costs and alimony payments are some above-the-line deductions that can help lower your taxable income. Contributions to a traditional IRA may be made as late as April 15, 2008, and will still be eligible for deduction in 2007.

Perform an overall financial checkup. The end of the year is always a good time for you to assess your current financial situation and plan for your future. Included in this assessment should be cash flow planning, health care planning, retirement planning, investment planning and estate planning. You should also update wills, powers of attorney and health care proxies for changes that may have occurred during the year. Remember, it’s never too early or too late to start planning for the future!

Adjust withholding. The IRS requires individuals to pay their taxes throughout the year with quarterly estimates, tax withholding, or both. If you don’t pay enough during the year, you can be hit with an estimated tax penalty, which is equal to the interest rate for underpayments. Although it may be too late for this year, adjusting your income tax withholding can eliminate or reduce the penalty.

Capital gains.  If you are considering the sale of real estate property that was held for investment purposes, you could spread out the tax hit over several years with an installment sale. If you structure the sale into two payments, one in December and one in January, you spread the tax over two years instead of one. The second benefit may come from a lower adjusted gross income.

Newlyweds and recently married.  Newlyweds and the recently divorced should ensure the name on their tax return matches the name registered with the Social Security Administration. A mismatch could unexpectedly increase a tax bill or reduce the size of any refund.
For recently married taxpayers, the tax scenario begins when the bride says "I do." If she takes her husband's last name, but doesn't tell the SSA about the name change, a complication may result. If the couple files a joint tax return with her new name, the IRS computers will not be able to match the new name with the Social Security Number.