Today we’re going to cover four smart ways to save on your taxes. I don’t know about you, but saving on your taxes is very important to me because it means I’m keeping more of my money in my own pocket; let’s cover a few ways to do this. Number one is to keep a financial journal. It is too difficult for us to remember in our busy lives what we did 365 days ago. Whether you keep your financial journal on your computer or PDA or in a notebook is really important to your recall. Any time you’re out there spending money that may concern your taxes, or even if you just have a question for your tax consultant, keep it in your financial journal because at tax time this is an excellent tool to refer back to, to ensure you’re taking advantage of all your tax deductions.

Number two is start doing tax planning and don’t wait until December to do it. Tax planning shouldn’t be done between January and April because this is the time that we tax professionals are in compliance mode and putting together the necessary documents to file an accurate tax return. To give yourself the most time to do tax planning start May 1st and get in the conversation with your tax professional to figure out ways to reduce your taxes.

The other thing that you want to make sure you’re doing is putting together a tax projection every year. This should be done at least by June 30th because it can show you where your tax bill is going to be for the following year and will give you a target to work from. Knowing exactly where your tax bill is going to be is really going to help you focus on tax reduction strategies.

The fourth most important thing to do is to increase your level of tax knowledge; your tax professional needs to be mentoring you and providing you with some education a little bit at a time, this way they know when the right time to ask a question is. Whenever there’s money in motion or whenever you’re thinking about doing something financially be sure to discuss it with your tax professional so you’re getting the most bang for your buck.

If you get these things done by June 30th, you can almost guarantee you’ll see a lower tax bill.