Income Tax "After Action Review"
When a business completes a large project or product introduction, the project team usually completes an “after action review”. The purpose is to identify and document the successes of the project, so they can be replicated in the future. Aspects that need to be changed can be pinpointed, and plans made for improvement before the next project.
Now that your own “large project” of filing your income tax return has been completed, you may want to perform your own “after action review”.
Did you get a significant refund or have to pay a large amount when you filed your return? Then consider using the IRS Withholding Calculator at www.irs.gov to determine whether you need to give your employer a new Form W-4, Employee’s Withholding Allowance Certificate to change the amount of money withheld from your paycheck. You can use the results from the calculator to help complete the new form to give to your employer, so you can avoid having too much or too little Federal income tax withheld from your pay. Watch a short video about the Withholding Calculator here.
Create a filing system
Another aspect of the major project of income tax filing is record keeping. If you haven’t already established a filing system for documents you will need for your 2016 return, don’t wait any longer.
Use your 2015 income tax return as a model, and make a list of the documents you gathered to complete that return. Examples of documents to be listed might include:
- W-2’s and all other forms showing income received
- The bill for your safe deposit box
- The bill from your tax professional for tax preparation services
- Receipts for real estate and personal property taxes paid
- Receipts for cash and non-cash contributions to charities
- Receipts for medical expenses
- Documents regarding your health insurance coverage (Forms 1095-A, 1095-B, and/or 1095-C)
As these documents arrive in the mail or you acquire them in other ways, add each one to your file, crossing each document off the list as you go. Then you can always be on the look-out for the remaining documents you need.
Watch this short video for other recordkeeping ideas to make next year’s filing season less painful.