You’ve got less than 12 days to reduce your taxes for 2006! I know it’s the holidays but it might be tax wise to take some time before 1st of January to check out your taxes.
To start off, you might run some of your 2006 income and deductions numbers through the Tax Estimator on TurboTax’s website to see which way your 2006 taxes are headed – refund or balance due. Go to TurboTax’s website, click on the Tax Tips tab and scroll down to find the tax calculator called the Tax Estimator. Dig out a copy of your 2005 tax return and your latest paycheck stub and then follow the steps in the Tax Estimator. And remember if it looks like you are receiving a large refund, you may be having too much tax withheld from your paycheck. And too small a refund or a balance due, you are having too little withheld. Read Common Tax Mistakes, Not updating your Form W-4 to learn how to update your Form W-4.
In a previous blog, Four Tax Tips to Reduce Your 2006 Taxes, we mentioned four things to do prior to January: giving cash and giving goods to your favorite charities for tax deductions and buying that hybrid car and adding energy efficient improvements to your home for tax credits. Take some time to read this blog! Check back with us on Friday. We’ll have a few more late in the tax year tips!