bass
Trail Wise!
Posts: 1,420
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Post by bass on Apr 19, 2017 3:54:15 GMT -8
Sent mine in with a small payment last week. Most here understand a large refund means you gave the IRS an interest free loan. Some professionals recommend doing a "trial run" on Federal and State taxes in early December using last year's return with updated projections of income. A copy of last year's returns and a pencil to update the entries will help to get things in order for the April filing. Then as 1099's and other information come in they are simply put in the folder for this year's return. The "trial run" idea helps to make the April work a lot easier if you do your taxes yourself. And if you use an accountant you already have a folder set up with the things needed to file.
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herm
Trail Wise!
I love the Sierra Nevada, the California coast, and the Mojave Desert
Posts: 1,456
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Post by herm on Apr 19, 2017 5:49:07 GMT -8
In my case the past few years, my wife and I escaped owing federal and state taxes at filing time by contributing to an individual IRA for me. So that IRA contribution took us from the owe column to the refund column. And that refund goes to savings - this works for me/us - ymmv.
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Post by BorderCollieMike on Apr 19, 2017 7:59:49 GMT -8
I demonstrated the power of the IRA to my son this year. I helped him do his taxes and he ended up owing about $1K more than he'd expected. I showed him that if he'd open a traditional IRA and contribute $3K to it, then the IRS would owe him $200. It made an impression.
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Post by autumnmist on Apr 19, 2017 8:43:46 GMT -8
bass , another way to manage is to create spreadsheets comparable to the 1040 and schedules that you use and link them in an Excel workbook. I started that for my parents back in the 1990s, adding SS as a basic, minimum required IRA distribution, then dividends and cap gains as received. At that time I don't recall whether or not I could have gotten end of the year dividend and cap gain distributions online. Medical expenses were treated the same way - premiums, out of pocket expenses and mileage were added weekly, biweekly or monthly. The Sch. A and B worksheets were linked to the income worksheet, which was linked to the 1040 worksheet. So every time I added expenses or deductions, the data was updated in the 1040. End of the year calculations were all that was needed. It took a while initially to figure out the formulas to use and get the whole thing set up, but it was well worth it. I need to spend some time to do that again; tax preparation these days is far less streamlined, but not b/c I prefer it that way.
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