January Tax Tasks To Start After The New Year

Posted by: Brookside Admin

New Year's celebration

We're only a few days away from the end of 2016. That generally means that you only have a few days left to make financial moves that will make an impact on your next tax return. There are a few tasks that will change your next tax return even if you don't get to them until January. 

Browse through these tax tips for January and call us at Brown Kinion and Company CPAs for help preparing this year's tax return. 

Estimated tax payment

There are a number of reasons to make an estimated tax payment throughout the year. If you're self-employed, or a contractor who doesn't have taxes removed from your paychecks, you'll need to make estimated tax payements to avoid a big lump sum payment due in the spring. Even if you have a more typical payment structure, you may realize that you're not having enough withheld from your paychecks, or you may have received a surprise windfall at the end of the year. Whatever the reason, if you know your tax bill will be sizable in April, now's the time to make a payment to cut that down. If you didn't pay enough in estimated taxes, you could also be subject to an underpayment penalty. But, you can save yourself from that penalty by making a payment before January 15th. That payment will be retroactive to any underpayment from 2016. 

Organize your tax documents

While you won't owe less in taxes because you're well organized, you could potentially pay less. Having all of the documents necessary for your tax return could help you find opportunities for deductions, or at least ensure you don't miss anything that results in a penalty. It also helps you get your taxes finished on time without as much hassle and stress. 

We recently put together a list of tips for how to get organized for tax time, and these tips are perfect to start in January. 

Decide to itemize or not

The standard deduction for 2016 is $6,300 for singles, and $12,600 for married couples filing jointly. If you file a standard tax return, that's the deduction you'll receive. But, if you think your qualified expenses add up to more than the standard deduction, you could save a significant amount of money by itemizing. Many taxpayers don't even consider this option simply because itemizing requires much more work. Since you'll need receipts and invoices to provide proof of some of your qualified expenses, ideally you will have decided to itemize early in the year. So, this January, look over your expenses for 2016. You can still scrape together everything you need to itemize on this year's tax return. You can also decide to itemize on next year's return and start saving and organizing documents now. By doing so, itemizing will be simple and easy next year. 

At Brown Kinion and Company, we provide expert tax help regardless of your situation. Contact us at our offices in Tulsa / Bixby, and Broken Arrow to find out how we can make tax time easier for you.