How to Plan Ahead for Tax Day 2011
Tax day 2011 has been moved to April 18, 2011 because of a holiday (Emancipation Day) in Washington D.C. This leaves 84 days from now until tax day, the annual tax filing deadline. As tax day approaches, here are a few things to keep in mind as you prepare to file your taxes:
Start collecting your tax forms now. As your tax forms start to arrive (for example, W-2 forms, 1099 forms, and so on), start collecting them together into a single place. By keeping your tax forms organized now, you won't have to search for them later.
Make a last-minute 2010 contribution to your Roth IRA. Remember that the tax filing deadline is also the deadline for Roth IRA contributions for the previous year. Single tax filers with an adjusted gross income (AGI) of up to $105,000 are allowed a maximum contribution of up to $5,000 for the 2010 tax year. And people who are married filing jointly with an adjusted gross income of up to $167,000 can also make the maximum contribution. (If you do not have a Roth IRA, starting one is your first action item for this tax season! Try Sharebuilder Roth IRA (now E*Trade), which is what I use. Here is a sample Roth IRA portfolio using ETFs.)
Consider a tax-deductible charitable donation. Charitable donations are generally tax deductible. If you are expecting a tax bill and have some cash to spare, consider a charitable donation to help lower your 2010 taxes. Charity Navigator can help you search for eligible charities.
Waiting until the last minute to start working on your taxes is a recipe for being caught unprepared. Missing tax forms, or a larger-than-expected tax bill, can put a damper on your springtime and your other financial plans. Planning ahead for tax day will help you to avoid being surprised on April 18th.
