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How Do I Tax Plan for the 2017 Tax Year? 

What Is Tax Planning?

This is taking advantage of all the tax knowledge and tools at your disposal before December 31 to estimate your income taxes, qualify for the right credits, deduct the most expenses, reduce your taxable income, and pay less taxes.

What is Tax Time?

It's the period you need to prepare and file a tax return. If you owe taxes, you also pay them during this time. 

Tax Time is usually from January 1- April 15 (April 15 is the general tax return filing/tax payment deadline). However, we recommend tax planning throughout the year, not just during tax time.

Why Tax Plan Now?

Consider these reasons why you may want to tax plan now: 

  • Your living situation has changed during the year. 
  • You want to start saving money now.
  • You want to qualify for 2017 tax deductions and credits by December 31. 

When Do I Tax Plan? 

You can tax plan during one or all of these times throughout the year:

Year-Round Tax Planning: January 1-December 31

You can do the following tasks to tax plan all 365 days of the year:

  • Adjust your paycheck withholding with a Form W-4 so you get your next tax refund now.
  • Keep track of all your tax records (W-2's, receipts, canceled checks, previous year returns, etc.) so you're ready to file next year's tax return or prepare for a possible tax audit.

From January 1-April of Each Year

Complete these tasks in order to file your tax return on time: 

From April-October of Each Year

Do these action items after Tax Time to keep your taxes up-to-date: 

From October-December 31 of Each Year

Here is a list of action items you must do in order to claim tax breaks on your next tax return:

Avoid Surprises: Use the FREE 2017 Tax Calculator and Tax Refund Estimator

Free 2017 Tax Return Calculator

How to Tax Plan in 3 Easy Steps

1. Check Your Paycheck Withholding

Do you want your tax refund in your paycheck? Recent IRS statistics show that almost 100 million (or 75%) of all Americans get a tax refund check, and the average refund check is for about $2,400. So why not get some of this refund now as part of your regular paycheck? Every month most taxpayers pay an average of $200 too much in income taxes.

To find out whether or not you need to update the taxes withheld from each paycheck, use our Tax Withholding Assessment Tool.

2. Use the efile.com Free Tax Calculator to Estimate Your Taxes

Where can you find your estimated income? If your income has not changed from last year, simply begin by entering the information from last year's W-2 into the efile.com Free Tax Calculator. Alternatively, you can use the year-to-date income from your latest pay stub to estimate your expected annual income for the year (keep in mind that the calculator is based on currently available figures which may be subject to adjustment).

3. Keep Tax Records

The IRS recommends that you keep all tax-related records for 3 years in case of an audit. However, some old tax documents, such as last year's W-2's, can come in handy when you are filling out your tax return this year.

Here are some examples of tax-related documents that you might want to keep:

  • W-2 forms
  • Pay stubs for the year
  • Mortgage payment stubs and/or home purchase closing statement
  • Last year's tax return (for quick reference and comparison)
  • Receipts from anything you might claim as an itemized deduction
  • Receipts from any charity (e.g. for church tithes, disaster relief donations, etc.)
  • Car mileage log (in case of business use)
  • Any receipts for business travel expenses
  • Canceled checks (especially for IRA contributions and other deductions)
  • Credit card statements and bank statements (to verify any deductions)
  • Medical bills (especially if they exceed 7.5% of your income)
  • 1099-G form (for deducting state or local income taxes)
  • 1099 forms (from any dividends or other income paid to you)
  • Mobile phone bills (especially if you made charitable donations by text message)

TIP: To make your mountain of documents easier to store, try scanning them and keeping them as PDF files. This way, you can print them out if you need them. If you do this, remember to back up your computer!

8 Great Practical Tax Planning Tips

  1. Keep records for at least 3 years in case of an IRS tax audit. For your own peace of mind, you might want to keep them longer. Start a file folder at the beginning of each year, and put all of your receipts into it.
  2. Check your pay stubs against your W-2(s) to make sure they add up. Even employers can make mistakes!
  3. Study last year's tax return. Are there any credits and deductions which you are you still qualified to take? Are there any you did not take, but for which you now qualify?
  4. Deduct the cost of last year's tax preparation. Next year, you will deduct any fees paid for the preparation of this year's tax return. Also deduct the cost of any tax-related consultations, seminars, books, or newsletters, etc.
  5. Donate to charity! The IRS only requires receipts for charitable contributions of $250 or more, but it's a good idea to keep receipts for any donation.
  6. Make long-term investments. Short-term investments are taxed normally, but those held for over a year are taxed at only 15%.
  7. If you have planned your taxes successfully enough to receive a tax rebate, you should invest it in an Educational Savings Account, an IRA, or a savings account at your bank. Use the money to start preparing for next year's taxes.
  8. You don't have to take the standard tax deduction. Use our tax calculator to itemize your deductions, then see whether the resulting amount is higher than the standard deduction available to you. Choose the higher amount!

Additional Tax Planning Tips

  • Summertime Tax Tips: How do summer and taxes go together? You can take advantage of deductions that relate to all your summer activities, such as camp expenses! These summer tax tips will help you save money when you file your tax return later-helping you stay cool!
  • Year-End Tax Tips: We provide tips for year-end tax planning. They will help you plan your deductions and credits, as well as estimate your tax refund and/or tax payments, by December 31.
  • Tax Preparation and Planning Checklist: Need help keeping track of all the tax documents you need to prepare your tax return? Print out our tax return checklist and see how easy it is to "check off" all the W2's, tax credits, and other items you need to file your return!
  • Tax Deductions and Credits to Claim by December 31: Before you prepare and efile or file your 2017 Tax Return (due April 17, 2018), make sure you're aware of all the 2017 tax credits and deductions you can claim (if you're qualified) before New Year's Eve!
  • Stupid and Smart Things Taxpayers Do When Filing Taxes: Taxes can be stressful for many taxpayers. Unfortunately, they may be capable of making mistakes on their tax returns when they are stressed.

Once you're relaxed, review our list of stupid and smart things to consider when completing your tax return!