Tax Planning

We have a long-standing tradition in this country of tax aversion. Nothing riles us up more than the topic of taxes.

Of course, not pay is not an option. I don't recommend tax evasion as it generally doesn't work out well.

However, tax avoidance is a perfectly legal, respected, annual right of passage for all of us. Tax planning is the best way to use the tax code in your favor and lower your tax bill each year.

Smart tax planning requires some forethought. You can't roll into April each year, slap your tax forms together, and expect the lowest tax bill and biggest refund ever. By then it's already too late.

Taxes will be the biggest expense in your life. You'll need to plan in advance for real tax savings. A healthy financial plan combined with smart tax planning throughout the year is the best way to keep more of your money working for you.

Understanding how the changing tax code affects your financial decisions before you make them is the best way to plan for and save on those costs. But make sure you don't pile up the tax savings this year, at the expense of next year. A proper tax strategy will lower your taxes throughout your life.

To that end, I put together this collection of resources you might want to know about before starting that process, including some things you might overlook, and other helpful tips that could save you money. Or you can browse through the category at your leisure.

Tax Planning Guide

Tax Prep Checklist

File Your Taxes

H&R Block
How to File a Federal Tax Extension
Tax Deadlines
Last Minute Tax Return Reminders Before You File


Federal Income Tax Brackets
How Tax Brackets Work
Breaking Down the 3.8% Medicare Surtax
How to Find Your Modified Adjusted Gross Income

Taxable Investments

Dividends and Capital Gains Tax Rates
Qualified Dividends
Tax Forms Every Investor Should Know About
Guide to Calculating Cost Basis for Tax Savings
Tax Harvesting: Using Investments to Lower Taxes
Wash Sale Rule
Special Dividend Tax Rules
REIT Tax Rules


A Saver's Guide to Retirement Accounts
Saver's Credit: Tax Credit for Retirement Savings
401k Contribution Limits
Roth IRA Contribution Limits
Traditional IRA Contribution Limits
Traditional IRA Deduction Limits
IRA Deadline
Best Brokers for an IRA

Helpful Tax Tips

7 Tax Planning Ideas that Offer Big Savings
Year End Tax Tips to Plan Now
Home Business Deduction Tax Tips
How Long Should You Keep Tax Records?
Best Tax Filing Software
TurboTax Review: Tax Prep Made Easy
H&R Block at Home Review

Tax Harvesting: How Investing Lowers Taxes

Tax HarvestingThere are only a few ways to get out of paying taxes. Tax evasion is the wrong way to do it. Tax avoidance is the other, legal way around it. My point is, taxes are a cost you can manage and tax harvesting is a piece of a tax efficient investment plan.

Most of us have fairly consistent income. It’s usually investment income that changes from year to year. The tax code is set up in a way that investment income is taxed at different rates. When you invest through a taxable account you have to plan for income tax on interest earned, along with capital gains tax, and dividend tax.

The tax code lets you use or harvest investment losses to offset capital gains. And a forward thinking investor might sell a gain today to avoid higher taxes in the future. Continue Reading…

The Easy Tax Preparation Checklist

Tax Preparation Checklist

Let’s face it, tax season is a procrastinators paradise. Unless you’re getting a refund. Then it’s the biggest hurry up and wait event as you try to file your return early. In either case, being organized beforehand will make the process much smoother. That’s where a tax preparation checklist comes in handy.

There’s nothing more I hate than having to waste several hours digging up that one misplaced tax form. It’s one reason I use TurboTax, because it keeps track of all my tax records year after year so I don’t miss anything.

If you do your own taxes like me, this checklist has all the tax forms, receipts, and records you might need to file your taxes this year. Then, when you finally sit down to do your taxes, you’ll have everything in front of you, so you save time and money on your taxes every year.

Continue Reading…

2014 Dividend and Capital Gains Tax Rates

Dividend and Capital Gains TaxMuch of the discussion around investing involves managing costs. Taxes need to be part of that talk. Like fees and expenses, dividend and capital gains tax eats away at your returns.

Any time your investments make money, taxes aren’t far behind. To make it easy on us, Congress whipped up a simple complex tax code for income, dividend, and capital gains tax rates. Lucky for us, that tax code can change on a whim, making it worth staying updated on.

Before we go any further, dividend and capital gains tax are for money invested through taxable accounts only. Taxes on investments are a moot point when dealing with retirement and other tax advantaged accounts. You can buy and sell all day without worrying about the tax consequences, though I don’t recommend it. Continue Reading…

7 Tax Planning Ideas That Offer Big Savings

Tax Planning TipsDid you get the most tax savings possible this year? Is there anything you could have done differently that would have saved you more money? I bet there was.

You need to be proactive for big tax savings. By the time April rolls around it’s already too late to work the tax code in your favor. The only planning you have left is a last-minute IRA contribution before the deadline to salvage some savings.

Real tax planning is an ongoing process of making small financial changes that lead to big tax savings year after year. You need a plan for that and our extensive tax code offers up some places to start. Continue Reading…

How Long Should You Keep Tax Records?

Tax RecordsTax season is stressful enough just getting those returns finished and sent in time. Now you have to deal with storing all those tax records. Or do you?

The good news is you don’t have to be a hoarder. But before you start force feeding that shredder, there are some tax documents you should hold on to for a little while.

If you’re like me, you may be holding on to tax records out of fear the IRS will show up for an audit or maybe it’s just a keepsake of incomes past.

The hard part is deciding what records should be kept, what is junk, and how long it all needs to take up space. The IRS, of course, has all the record keeping specifics you’ll ever need. Continue Reading…

The Tax Deadline Is Only Two Weeks Away

Tax DayAre you ready to join the mad rush to the tax deadline or did you finish your return early? There’s about two weeks left to get your return finalized, signed, and sent to the IRS. With that in mind, I’ve put this reminder together with info to help you make the most of your refund and get that tax return in on time.

The Deadline Is Here

Once again, April 15th is the deadline fast approaches. That’s the day your tax return and any taxes owed are due. Or, you can file a tax extension, to get an extra six months.  Even with an extension, the IRS still wants that money paid by the deadline. Continue Reading…