Celebrity Tax Expert Roni Deutch Explains the Importance of Mid-Year Tax Planning

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The year is now half over and although most Americans wait until April to think about taxes

North Highlands, CA (Vocus) August 21, 2010

While most Americans are likely concerned with planning summer vacations and pool parties, celebrity tax attorney Roni Deutch is encouraging taxpayers to spend their free time making mid-year tax projections and plans.

“The year is now half over and although most Americans wait until April to think about taxes,” explains The Tax Lady Roni Deutch, “I highly recommend tax planning throughout the year. The summer is a great time to review your finances because you still have nearly half the year to take action to lower your tax liability—such as making changes to your withholdings.”

Listed below is a section of the blog entry titled Mid-Year Tax Planning: The Perfect Summertime Activity that was published on Deutch’s personal blog. To view the full entry, check out The Tax Lady Blog.

Mid-Year Tax Projection

Since the year is half way finished, you can easily estimate what your total income for the year will be. Unless you anticipate a new job, a big bonus, pay increase or are self-employed and unsure of your earnings for the rest of the year, you can simply add up your wages from January through June and double it. Using the 2010 income tax brackets you can then calculate your total federal tax rate. Look to see what you have already paid in federal taxes, and if your total taxes paid is less than half of your yearly tax liability, then you might want to consider adjusting your withholdings or making an estimated tax payment.

Review Your Withholdings

If you are underpaying on your federal taxes, you might want to adjust your withholdings. For wage earning employees, you can simply ask your employer for a new IRS Form W-4. Either change your allowances or have an additional dollar amount withheld from your paychecks. If you have been overpaying the IRS, you might want to change your withholdings to have less taken out of your paychecks. Although you might not get as large of a refund in April, you will have more money in your wallet each month!

Estimated Tax Payments

If you are self-employed or have decent capital gains throughout the year, it is especially smart to calculate your 2010 tax liability. The IRS will assess a penalty if you underpay your taxes, so it might be a good idea to make an estimated tax payment. The most recent quarterly tax payment due date was June 15th, but you can always make a late payment. The next payment is due September 15th. To learn more about estimated tax payments check out this entry on the Roni Deutch Tax Center – Tax Help Blog.

Organize Your Files

When you have a few hours free, it might be a good idea to look over your financial records and tax related documents. Make sure you have documentation for any tax deductions or credits you plan to claim, all of your pay stubs, and receipts for any business or travel expenses you intend to write off. If you are missing any receipts you should try looking for documentation via your credit card or bank statements. This will be easier to do now, instead of six months from now when you might not exactly remember what day it was you took that client out to lunch or where you went.

Give to Charity

Another great way to lower your tax liability is to make charitable contributions. You could donate your winter clothing, as you will not need it in the hot summer weather, or any other household items you no longer need. Additionally, as the BP oil leak continues to spew oil into the Gulf you could make a monetary donation to a group working on the cleanup such as the National Wildlife Foundation.

About The Tax Lady Roni Deutch

Millions of people recognize tax attorney Roni Deutch as The Tax Lady®. She has been helping taxpayers nationwide resolve their tax liabilities for over 19 years. As an industry leader, she has saved her clients tens of millions of dollars and has helped thousands of families settle their back taxes. To learn more about The Tax Lady Roni Deutch, you can visit her blog or YouTube profile.

The Tax Lady's Guide To Beating The IRS And Saving Big Bucks On Your Taxes
(BenBella Books, February 15, 2009, Paperback Price: $16.95, ISBN 978-1-933771-77-9)

Contact:

Nicole Elton
Roni Deutch, A Professional Tax Corporation
877-232-8477 Ext. 2410
http://www.ronideutch.com

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