ADJUST YOUR WITHHOLDINGS
Did you get a bigtax refund last year, or worse, did it turn out that you weren’t havingenough money withheld and you owed the IRS money? If you’re an employee, thebest-case scenario is for the IRS to take out what you’ll owe, but not a pennymore.
Of course, it’s next to impossible to be so precise, but ifyou got thousands of dollars back or owed more than a few hundred dollars, itcould be smart to visit your payroll department and adjust your withholdings.
ORGANIZE YOUR TAX DOCUMENTATION
The chances of an IRS audit are very low overall. Fewer than1% of individual tax returns get audited, and this percentage is significantlylower for people whose incomes aren’t unusually high or low, and for people whodon’t have small business income.
Having said that, if you are audited, how organized your taxdocumentation is can make the difference between a smooth process and anightmare. You don’t need to do anything too elaborate — for example, I use anaccordion folder to sort tax documents into categories (W2s, charitablereceipts, mortgage documents, etc.) so that if I’m questioned, there will beminimal paperwork to track down.
LEARN ABOUT THE NEW TAX LAWS
You may have noticed that the recently-passed tax reformbill has been referenced several times so far, and for good reason. Thelegislation made a bunch of significant changes to individual federal incometax law, and these changes are too numerous to discuss them all here, so it’s agood idea to familiarize yourself with what’schanging for 2018 and beyond.