Plan Your Taxes for 2014

Last updated on May 5, 2014

Taking a little time in planning your taxes can bring you a lot of benefits when the time comes to file your taxes. While planning taxes, consider using retirement funds, filing status, deductions and credits to lower your tax liability. If your income level and sources of income are predictable, then you may know which deductions and credits you will be using in 2014. This will help you to gather and organize your tax receipts well, but also help you in planning your finances better.

You can put your extra funds in your 401(k) to reduce your taxable income. That will help in keeping your savings non-taxed and also increase your savings for your retirement. If you max out your 401(k), you can even go down to the lower tax bracket, which can mean substantial reduction in taxes.

You should consider using as many deductions as you can on your tax return. For example, when using medical costs for deduction, you can claim dental care, doctor’s visits, health-related upgrades at home, laser vision surgery, etc. Combined, these deductions will help you to save more in taxes.

Keeping your tax receipts and documents organized is important. As the IRS can at anytime demand the receipt of any of the deductions you claim on your tax return, it is a good idea to keep separate files for each tax year so that you can easily find the receipts for any given year.