No, not quite 2016, but it is coming and now is the perfect time to start planning on next year's taxes so come New Year's you will have plenty of time to party. And, if you have not completed your 2014 taxes yet don't worry, you can do most of the work one time and be prepared for next year's taxes too.
Whether you use a spreadsheet, folders or a shoebox, separate information and receipts into categories: charitable donations, medical expenses, job search related expenses and education are good general categories to organize your tax information. So label a folder 2015 (and maybe even one for 2014) and gather up your receipts.
First things first, did you pay a penalty for not having health insurance in 2014? Enroll now during the special enrollment period for taxpayers who owed a penalty on their 2014 tax returns, but hurry up time is running out! The special enrollment period ends April 30. Not only will you avoid a penalty -- up to three times higher next year, but you may also qualify for advanced credit payments to subsidize your premium costs and reduce your out-of-pocket expenses. Go to healthcare.gov to sign up.
Life events, like marriages, babies and new houses can change your tax situation. Since most big life events are planned, you can get a jump on things if you take a look at how they will impact your taxes. Don't forget that if you receive advance payments of the premium tax credit it is important that you report life changes, such as higher income or increased family size, to your Health Insurance Marketplace. If you don't report your life changes to the Marketplace, you may have to pay some advanced credit back next year at tax time.
Now is a good time to think about how much in taxes you have taken out of your paycheck every pay period. Want what seems like an instant raise? Stop loaning Uncle Sam money all year and reduce your withholding. It's true that you may not get that giant refund next year, but you would be keeping more of your pay in your pocket when you earned it. To increase or decrease the amount of taxes you have withheld, you simply file a new Form W-4 with your employer. If you aren't sure what changes to make or how to make them, contact a Tax Pro or use the IRS Withholding Calculator, to help you determine what your withholding should be.
The earlier you start planning for next year's taxes, the more control you take over your financial fitness. Athletes often say you cannot get ready for a race or competition in a short period of time. It takes time: training, practicing and then actually competing. The same can be said for your taxes. Start earlier, do a little at a time and be ready to get more of your money back when you file next year.
