Steps to Take Now to Get a Jump on Next Year’s Taxes

Tax planning is for everyone. Get ready today to file your federal income tax return next year.

Adjust your withholding or make a tax payment

If you received a smaller refund than expected or owed an unanticipated tax bill this year, consider adjusting your withholding to help protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year. Or, you may prefer less tax withheld up front and receive more in your paycheck.

Take these actions to get ready for next year:

  • Use the Tax Withholding Estimator to help make sure you have the right amount of tax withheld from your paycheck, pension or other income.
  • Submit a new  Form W-4, Employee's Withholding Allowance Certificate to your employer to change withholding. If you receive pension or annuity income, you can use the results from the estimator to complete a Form W-4P, Withholding Certificate for Pension or Annuity Payments and give it to your payer.
  • Some taxable income is not subject to withholding including self-employment and gig economy income.  People with this income who also have income from a job may want to adjust the amount of tax your employer withholds from your paycheck.
  • Make estimated or additional tax payments now if the tax withheld from your salary, pension or other income doesn’t cover the 2019 income tax that you’ll owe for the year.  Form 1040-ES, Estimated Tax for Individuals also has a worksheet to help you figure your estimated payments. Visit IRS.gov to explore payment options.

Get ready for your refund

Combining direct deposit with electronic filing is the fastest way for you to get your refund. When your refund is deposited directly into your bank account, there’s no reason to worry about a lost, stolen or undeliverable refund check.

Different factors can affect your refund. Be careful not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations. If you claim the Earned Income Tax Credit or Additional Child Tax Credit, the IRS cannot issue refunds before mid-February.

Renew your Individual Taxpayer Identification Number (ITIN)

If you use an ITIN to file, make sure it hasn’t expired. Visit IRS.gov/ITIN for more information.

Organize your tax records

Gather your records. Develop a recordkeeping system - electronic or paper - that keeps important information in one place. Add tax records to the files as you receive them. Having all the needed documents on hand before you start to prepare your return helps you file a complete and accurate tax return.

This includes year-end Forms W-2 from employers, Forms 1099 from banks and other payers, other income documents, virtual currency transactions and Forms 1095-A from the Marketplace for those claiming the Premium Tax Credit. You should confirm that each employer, bank or other payer has your current mailing address. Typically, these forms start arriving by mail in January. Review them over carefully and, if any of the information shown is inaccurate, contact the payer right away for a correction.

Please contact  Hampton Roads Accounting (HamptonRoadsAccounting.com) for all your tax preparation needs.  We work with individuals and small businesses, and are are here to ensure you have the lowest tax liability possible.

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