Column: Your Taxes

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Tax Advice Before April 15

By Sean Dowling

The end is near… of the initial income tax filing season. For tax professionals, it is the light at the end of the tunnel but for most it is a looming deadline that they must address. For those of you who haven’t filed here are my top ten ideas:

1. Don’t file. By April 18, that is. Prepare an extension and pay any tax due by the 18th, and then you have six more months.

2. Save the aggravation (and money) of doing it twice. Extensions are sometimes beneficial when you have certain accounts that tend to revise their information right up to the deadline.

3. Make sure you do it right. Whether you extend or not give yourself (and your tax professional) ample time to get the right answer. 

4. It isn’t paint by numbers, but it doesn’t have to be astrophysics either. You aren’t just transferring numbers from one box to the next. Within the tax code are rules that can help you pay less tax. 

5. The tax code is your friend. It isn’t just there to intimidate. Knowing the rules can help to get the best outcome. 

6. Not all tax professionals are created equal, and you pay for what you get.  Sometimes there is only one answer. Unless you are sure you know what it is, get a qualified tax expert. 

7. Tax time is also a good time to review your finances (or make an appointment before summer starts with your advisor). One of the most overlooked items: keeping beneficiaries current on your retirement accounts. 

8. What’s your tax rate? If you don’t know, you need to get an idea of what you have paid on average the last few years. After all, it is not what you make but what you keep. 

9. Now that you know your rate, you should be thinking, how can I make it lower?  Don’t count on Congress. Take matters into your own hands and start a tax plan of your own.

10. Be an enterprise. All savvy businesses know the tax they’ll be paying well before the filing season. Most know it before their year even starts. Options are limited after the fact, but you may have some options. The best idea is still to plan ahead.

If you are wondering what is in the 74,608 pages of Internal Revenue Code isn’t enough to keep you up at night, then maybe they can help cure your insomnia. For those of you who didn’t recall there was a deadline here is your reminder. Here’s to wishing you a less taxing filing season. 

Sean M. Dowling, CFP, EA, is the president of the Dowling Group, a prominent financial advisory firm based in Greenwich. They are experts in assisting clients with income tax preparation, investment management, financial planning, risk management, and family office services.

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