Start Planning for Tax Season Now

Late summer is the perfect time for last-minute tax planning. With four months until the end-of-the-year deadlines, follow these tips to help you prepare:

Bulk up your retirement contributions. Max out your retirement savings by contributing the full 401(k) amount. For 2012, you can contribute up to $17,000 and for those 50 and older, the limit is $22,500.

Check out any expiring benefits that might apply. With the anticipated “taxmageddon” coming up, 2012 could be your last chance to take advantage of the educator expense deduction, tuition and fees deduction, and sales tax deduction.

Delay deductions. Save your big deductions until next year if possible. For example, you might want to get as much money into the bank before December 20 so it counts as income in 2012, before any potential tax increases.

Check that you’ve been paying enough taxes. If you received any income beyond your usual paycheck, you may end up owing a lot more in taxes. People who earn a significant higher salary than their spouse are also at greater risk of paying higher taxes. If you think you may owe more money in April, start preparing now.

Keep track of important receipts. If you run your own company or spend money on educational costs to boost your career, some of those expenses may be tax deductible. Make sure you file them so they are easily accessible when April comes around.

For more mid-year tax planning tips, please visit US News.