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Include taxes in your New Year's resolutions Expand your list of New Year resolutions to include the following: 1. Review and adjust your withholding. If
you receive a big tax refund for 2007, resolve to file a new Form W-4 to
adjust your withholding and reduce your refund to a reasonable size. It's
comforting to receive a small refund, but remember that a refund means you're
making an interest-free loan to the government — money you could be
investing or using for your own benefit. Resolve to contribute at least enough to your 401(k)
plan to earn your employer's match. Otherwise you're giving up “free” money.
If you can afford to contribute more to your retirement plan or to an IRA,
do so. At retirement time, you'll be glad you did.
3. Review your investments quarterly.
Resolve to review your investments regularly. Decide
on investments to keep or sell, and rebalance your portfolio.
4. Set up an education plan.
If you have children or grandchildren, resolve to
meet with your tax advisor and establish a tax-advantaged plan to fund their
education.
5. Keep better records.One secret of good tax planning is good recordkeeping.
Resolve to set up a simple system to maintain essential records.
6. Update your estate plan.
Resolve to update your estate plan this year. You'll
be surprised how quickly changes can occur. And remember that good estate
planning includes more than just a will or living trust.
7. Take your tax preparer to lunch.Some time after April 15, go to lunch with your tax preparer. Take a
copy of your income tax return and review it line by line, discussing ideas
for additional tax savings in 2008.
Please call our office if you have questions or if you would like to set up that after-tax-season lunch appointment. © copyright 2008 |
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