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Checklist: Income Tax Checklist

Last update on: Oct 12 2016

The simplest tax strategies often are the most effective, and they don’t cost much to implement. They also are the most forgotten and overlooked. But you have to implement them before the year ends. Consider these strategies.

  1. Pay IRA fees from a separate, taxable account. It makes a big difference in how much accumulates in the IRA over 20 or 30 years.
  2. Contribute to an IRA early in the year if you have earned income.
  3. Consider contributing to a Roth IRA if you have earned income.
  4. Consider converting a regular IRA to a Roth IRA if your adjusted gross income is no more than $100,000 and can pay the conversion taxes from separate funds.
  5. Help a child or grandchlid establish an IRA, if the youngster has at least $2,000 of earned income for the year.
  6. Donated appreciated stock or mutual funds that were held more than one year to a charity and deduct the fair market value.
  7. If you are working, consider asking your employer for additional tax free benefits instead of a salary increase.
  8. Estimate taxes on Social Security benefits early in the year and consider adjustments such as reducing IRA distributions, not taking capital gains, shifting income accounts to tax-free bonds, and boosting deductions for adjusted gross income.
  9. Remember to add mutual fund distributions in taxable accounts to your tax basis. This will reduce future capital gains taxes.
  10. Be sure to make proper quarterly estimated tax payments so that you don’t owe a penalty at tax return time.
  11. If you are employed, make sure your withholding does not exceed the amount you’ll owe in taxes.
  12. Be sure you are taking advantage of all the tax incentives to pay for the education of your children and grandchildren, such as education loan interest deductions, Hope Scholarship credits, Lifetime Learning credits, education IRAs, and qualified state tuition savings programs.



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