by Anthony Rivieccio MBA, PFA
So, you got your tax refund! Happy? Should it be bigger? Do you want a larger refund next year? If so, then start prepping for that tax year 2016 refund now!
Actually, you should have started Jan 1st. With two-thirds of the calendar year left, you should be able to catch up with your planning.
In my opinion, tax planning is learning how to incorporate your financial lifestyle into the IRS code.
There are over 350 tax deductions and credits available. A tax deduction gets you your “tax bracket equivalent” back, while a tax credit gets you a dollar for dollar deduction.
For example, if you are single, making $40,000, living in NYC, you will be in a Federal and State tax bracket of 40 percent.
So taking advantage of a ” charity” deduction, you will receive 40 cents back off of every taxable dollar. Taking advantage of “college credits” gets you a dollar for dollar tax deduction. For instance, a $1000 gift to charity will result in a $400 tax savings, while $1000 in college credits gets you back $1000
Well, you can read the IRS manual
Good luck with that! It’s always changing !
But the best advice, as we suggest to our clients, sit down with your Tax Preparer, now
Suggest to them, that you want to purchase 1 hour of their time. Your Tax preparer should already have a basic foundation of your financial lifestyle.
If not, spit it out to them
Tell your Tax preparer that you want to learn how tax credits and deductions fit into your tax plan and financial lifestyle.
Ask yourself these questions:
Do I have medical expenses?
Did I pay New York state and city income taxes or property taxes?
Do I have a mortgage payment?
Did I get robbed?
Did I have any casualty losses in my home?
Did I donate money, clothing, or property to a church or a non for profit organization?
Do I have job expenses?
Did I have to pay for legal, financial adviser, tax preparation, banking or investment services?
Do I own a small business?
Do I receive Rental Income?
Did I adopt a child?
Am I eligible for the elderly care credit?
Am I putting enough money into my retirement plan at work to receive the ” retirement savings” credit?
Did I go to school?
Did I pay alimony or child support?
If you answered yes to just five of these questions, you are leaving money on the IRS table.
Sit down with your tax professional now, so he can inform you of the things you need to minimize your tax liability and increasing your tax refund.
Anthony Rivieccio is the founder & the CEO of The Financial Advisors Group, celebrating its 20th year as a fee-only financial planning firm specializing in solving financial problems. Anthony, a recognized financial expert since 1986, has been featured by many national and local media including: Klipingers Personal Finance, The New York Post, News12 The Bronx, Bloomberg News Radio, Bronxnet, The Norwood News, The West Side Manhattan Gazette, Labor Press Magazine, Financial Planning Magazine, WINS 1010 Radio, The Bronx News and The Bronx Chronicle.
For financial assistance or a FREE 2015 Income Tax Extension, Anthony can be reached at (347) 575 5045.