Experts Offer Tips On Improving Tax Returns Next Year
WHITE PLAINS, N.Y. (CBSNewYork) — If you’re not happy with the way your tax return turns out this year, there might be something you can do to improve matters next year.
“The biggest mistake people make is thinking they’re not going to get old or that the tax man does not come calling for them,” Bridget Crawford, a tax professor at Pace Law School, told CBS 2′s Lou Young.
Crawford said too many Americans are cruising on auto-pilot at tax time, hoping for a big refund check and not looking at the big picture.
The deadline for filing federal income tax returns for 2013 is April 15.
“I usually try to pay as much taxes as I can so at the end of the year, I get more,” Hezzie Alya, a White Plains resident, told Young.
“It’s your own money you’re getting back,” Crawford noted. “Good for you, but you didn’t do your withholdings exactly right.”
CBS News business analyst Jill Schlesigner said taxpayers can fix their tax returns for next year if they act now.
“Try to do a quick calculation of the coming year before it’s too late,” she said. “If you need to adjust your withholding or change the way that you’re characterizing certain types of income, do it.”
Experts say before you adjust your paycheck withholding amount, you should max out your 401(k) contributions at work, give to your IRA until it hurts and open an education account, such as a 529 for each child or grandchild in your life.
“Contributions will be deductible up to a certain point for purposes of New York state income taxes and growth in that account is going to be tax free when it’s used for educational purposes later on,” Crawford said.
The picture, though, is hard to keep in focus when you’ve already spent the refund before it arrives.
The experts say your tax situation is really a snapshot of your overall financial health. If you structure things correctly, the return should come with a few hundred dollars of the estimated tax. A refund is not a windfall, they say; it’s a mistake.
With recent adjustments in the tax code, itemized deductions are becoming more important for more New Yorkers. They experts say the only way to take full advantage of that is to remember to save receipts throughout the year, especially for charitable contributions.
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