Vow To Be More Efficient

You can start by setting up a filing system for taxes that works for you. It can be as simple as a series of envelopes or folders to hold tax information. Or, if you prefer, a computerized program (QuickBooks) can easily keep track of expenses. 

What to keep track of varies from person to person, so a look at your last tax return will help you identify the tax matters that pertain to you. Make a folder or set up a computerized account for tax deductions using the tax return as a guide. You'll be amazed at how easy tax preparation will be next year with your own personalized recordkeeping system.

What's your tax bracket?

Your tax bracket is the percentage of tax that you pay on your last dollar of income. Once you know this percentage, you can better determine the after-tax cost of deductible items. You can find your tax bracket by finding the taxable income on your Form 1040 and looking up the rate at irs.gov ("federal tax rate schedules").

Refund or tax due?

If you received a large refund, you might consider reducing your withholding at work to free-up more take home pay now.

If you owed tax, you might consider prepaying a little more or increasing your withholding at work so an underpayment penalty might be avoided.