The right way to finish off tax season

Now that filing season is officially over, many Americans are putting this tax year behind them and looking forward to relaxation. But now that they are not preoccupied with collecting paperwork and looking over their deductions, now may be the perfect time to start getting ready for next year.

Filing taxes can be stressful when done at the last minute, so the weeks following this year's deadline can be a good period for individuals to put away paperwork and assess their situation for next year. There are several scenarios that may impact Americans' taxes next filing season, and being aware of them early can help individuals outline the deductions and credits they may qualify for, change their withholding status or put more money away in savings to cover next year's expected tax bill.

For example, millions of Americans are having difficulty with their mortgage payments as a result of the ailing housing market. Those who plan on refinancing their mortgage or entering into a loan modification will see the impact of these programs on their taxes, and some may face additional tax obligations as a result, according to Fox Business. For this reason, individuals who will have housing debt forgiven or interest rates reduced should meet with their tax preparer early on in the year to determine how these changes will affect their income taxes. This can give them time to prepare and explore ways to minimize their bill, if necessary.

The same is true for individuals who are unemployed or searching for a job. Income from jobless benefits is 100 percent taxable, but individuals can elect to have taxes taken out of their unemployment compensation to lower their liability. In addition, those who are actively searching for a job in the same industry in which they were previously employed should also start keeping records of the costs they incurred while searching for a job. This includes placement fees, postage for mailing out resumes, travel and phone costs for interviews and professional cover letter services. Qualified job-search expenses are deductible, but job seekers must provide sufficient documentation to claim the benefit.

Lastly, estate and gift tax exemption amounts are set to expire at the end of 2012, so individuals and business owners should speak with their tax preparer to make the best choices for their successors and beneficiaries.

Liberty Tax Service provides computerized income tax preparation and electronic filing. Each tax office offers customers audit assistance, a money back guarantee, and free tax return checking.

About Liberty Tax Service 
Liberty Tax Service is the fastest -growing retail tax preparation company in the industry’s history.  Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 8,000,000 individual income tax returns.  With 42 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service.   

Liberty Tax Service is the only tax franchise on the Forbes “Top 20 Franchises to Start,” and ranks #1 of the tax franchises on the Entrepreneur “Franchise 500.” Each office provides computerized income tax preparation, electronic filing, and online filing through eSmart Tax.