Getting a Head Start on Tax Planning

Tax day may be April 15, but tax season essentially begins as the previous year is ending. That’s because this time of year is the first opportunity to take the steps that will allow you to maximize your tax advantage as the filing date approaches.*

From December through February, you should be organizing records and watching for documents you may need. At the same time, you may have ongoing obligations for the coming year – perhaps a vendor contract or equipment you know you will need to buy. If it’s possible to pay cash in advance, the vendor may be willing to negotiate a discount in order to get the cash up front. This is not to say you should buy things just to get a tax deduction, but if you know you will need to buy them anyway, and you can afford to pay for them earlier, it only helps you to do so.

Aside from accelerating payments, gifts and distributions, this is a good time to generally get yourself organized for April 15th. Banks, brokerage accounts and retirement funds will likely be sending you statements you will need. Be on the lookout for them, and keep them in one folder that you will use for tax documents.

This is also a good time to review your beneficiaries and make sure these choices still reflect your priorities. Along these same lines, if you are planning to establish any educational accounts for your children, this is the time to do it.

And since you know you will owe taxes in the coming year, this is the time to estimate these amounts and budget for them.

It may take a little time, but taking actions like these will help to keep you organized and out of tax trouble in the year ahead – and perhaps for many years to come.

Have tax related questions or you’d like to set up a no-cost consultation with the Investment & Retirement Center located at First Financial Federal Credit Union? Contact them at 732.312.1500.

*Representative is not a tax advisor. For information regarding your specific tax situation, please consult a tax professional.
Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (866) 512-6109.  Non-deposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution.  CBSI is under contract with the financial institution, through the financial services program, to make securities available to members.  FR011204-32F7

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