Here's a piece from the tax experts at H&R Block and their National Tax Advice Day website on the top 10 tax resolutions for 2006:
1. I will take charge of my finances – Take control of your financial future by developing a detailed understanding of your income and expenses and by establishing clear financial goals.
2. I will keep better records – When receipts get lost, it’s easy to miss out on deductions for charitable contributions, medical and educational expenses and business costs. This year, take a minute to develop a simple, fail-safe method for hanging onto to those annoying little slips of paper.
3. I will save for retirement – Start now. It gets here sooner than you think. Not only will you be protecting your future, but you’ll enjoy tax benefits today.
4. I will review my W-4 withholding – Fine-tuning your payroll deduction gives you the opportunity to increase cash flow, reduce year-end tax liability or boost your refund. Think about your financial requirements and objectives and take command of your paycheck.
5. I will file my taxes electronically – Whether you do it yourself or rely on H&R Block’s experienced tax professionals, filing electronically cuts tax preparation time, speeds your refund and lessens the likelihood of an error. With do-it-yourself options like hrblock.com and TaxCut software and TaxCut Online programs, you can take advantage of built-in questions, checklists and safeguards, and even have your return reviewed by a tax professional.
6. I will know my tax rights – Because the IRS will allow taxpayers to amend returns filed in any of the prior three years, consider taking the free Double-Check Challenge: An H&R Block tax professional will check your past three tax returns to ensure that no deductions or credits were overlooked, the right filing status was claimed and the tax calculated correctly.
7. I will purchase a home – Buying a home can be one of the most positive and far-reaching financial decisions you will make. Not only are you building equity in an asset that typically increases in value, but you’ll reap a number of benefits and deductions at tax time.
8. I will start saving for my child's education – In 15 to 20 years, it will take an estimated $170,000 to $230,000 to finance your child’s college tuition and living expenses, depending on the type of school they choose to attend. So get started now. There are a wide range of college savings plans out there, and even a small regular contribution will grow and compound dramatically over time.
9. I will claim my education credits for classes – The federal government has created several important credits and deductions designed to help defray the cost of higher education. Talk to a tax or financial professional about how these options might help you.
10. I will deduct my student loan interest – Provided you fall within certain income guidelines, the IRS allows you to deduct the interest paid on any loan used exclusively to pay for education expenses (including room and board) for yourself, your spouse or a dependent.
Here's where I net out on the top 10:
1. I'm got control of my finances. ;-)
2. I keep good records already. :-)
3. I'm saving for retirement by maxing out my 401k.
4. I have my W-2 tuned.
5. I've filed my taxes electronically for the past few years. It's the best way to get the fastest refund possible.
6. I know my rights, but good suggestion on checking with a tax advisor -- they may be able to save you some money.
7. I already own a home.
8. I'm already saving for college for my kids -- though I need to sort out our college savings plan this year.
9. I don't have anything to claim at this point.
10. No student loan interest for me. No interest of any kind, for that matter.
One last suggestion: H&R Block. Do it yourself or have us do it. It's never been easier.
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