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Start planning 2012 return now

Organizing your financial information at the beginning of the year will make next year's tax return easier to prepare. Brush up on tax law, too.

By MSN Money Partner Jan 5, 2012 6:53PM

This post is by Robert Flach of MainStreet.

 

Happy new year! As I say at this time each year, now is the time for all good taxpayers to come to the aid of their 2012 tax return.

 

You read it right: I said their 2012 tax return.

 

If you want to make 2012 "less taxing" it is important that you start the year off right. The first step is to resolve to become more informed on federal and state income tax laws. You cannot know the right moves to make in your daily financial ife without a basic knowledge of the tax implications of your actions.

 

Learn what you can, and cannot, deduct on your tax return, including the special items that are unique to your trade or profession, and the rules governing any special situations that apply to you, and keep up to date on federal and state tax law changes.

 

Even if you use a professional to prepare your return, the more informed you are on tax matters, the more prepared you will be when you go to your annual tax appointment. A good way to stay up to date on tax law changes is to check the Internal Revenue Service website every so often. Post continues after video.

Next, set up a good system for maintaining tax records and receipts, whether you use an accordion file or hanging folders. Some deductions require special recordkeeping or additional information, such as business meals and entertainment, business use of "listed property" such as cars and computers, gambling losses and charitable donations.

 

If you are financially able to do so, be sure to contribute the maximum amount to your employer's 401k, 403b or 457 pension plan. For 2012 the maximum you can contribute is $17,000, plus an additional $5,500 if you will be age 50 or older at the end of the year. Contributions to these plans will reduce your federal, and often state, taxable wages and therefore reduce your adjusted gross income.

 

More from MainStreet and MSN Money:

VIDEO ON MSN MONEY

4Comments
Jan 15, 2012 6:17AM
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I like how they throw in the " Contribute the Maximum amount too the 401k" at the end?.  Myself I have a pretax Roth Savings account.  Saving the yearly receipts goes with out saying. Had my homes roof reshingled this year. Used "Energy Star" rated shingles. Guess what, the cost of the shingles will bring a tax credit. Last year did a wood burning stove. These little credits add up. I needed a roof any way, why not use the chance to get some money back at the same time.

Jan 15, 2012 3:26PM
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Why don't you get with it! You throw the word "taxes" and "filing" around as if there is no law behind taxation. Have you ever read the Constitution? What is "income"? Is it defined in the Constitution or the IRS Code (Title 26 USC)? Look at the 16th Amendment; it says a tax may be laid on the "income" from whatever source derived. This is an excise tax on the income, not on the individual. DIrect taxes are paid by the states. The Supreme Court over the last 100 years has defined "income" as being "ptofits and gains" made from business, property, and investments. Yet you all just walk around with your heads in the clouds never once questioning what you are doing; is it required by law, or is it not. Ask the IRS if you are required to file. You won't get a response; either that or you wil get a response that skirts the issue. Ask them to show you the law that specifically requires you as a worker to file or pay. Look at your 1040; does it define "income", or does it define what "wages" it refers to? NO. The type of wages that are gross income is the wages an employer pays to another and on which he may profit therefrom as part of his business. Check out your W-4; you are allowed to file exempt from wtihholding if you don't expect to have "income". The Supreme Court has said you don't earn "income" under the 16th Amendment by working for an employer and receiving compensation in return. To put it simply, if I give you a $100 bill and you give me back 5-$20's, that is a fair exchange, it is not taxed because no "income" has been received, no profit or gain. Don't blindly give away your Rights; know what your Rights are; working is a Right, just like breathing, praying, walking, etc.
Jan 15, 2012 5:36AM
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Amongst the best hidden International Accountants in Washington State:  JPS @ jodistodola.com

 

 

Jan 15, 2012 2:15PM
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What are all the things you can file on taxes for itemized. I need a list if anyone can help. I know there is other things that I can file besides my house. But I need a list things that the government want tell you can file.

 

thanks

eve

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