Take a time out to go over your tax return

By Morgan Thomas - bio | email

LUFKIN, TX (KTRE) – Taxes done? On time this year, too? Either your sending a check in the mail or a refund is coming to you. Just because your thrilled to finally be through with your taxes doesn't mean you need to put that completed tax return away just yet. It could be a wealth of information.

"Basically just keep that. Hang on to it. Don't throw it away, don't misplace it, Don't let the dog eat it. Just hang on to it," said Gus Patton, Manager of Liberty Tax Services.

Take a second look and study that tax return. You may have a lot to learn.

"Your tax return is going to tell you where you are as far as the percentage that you pay or rate of tax that you're paying on your money," said John Kennedy, Registered Representative with Woodlands Securities Corp, and the Advanced Financial Group.

That's your tax bracket, and mere cents can determine if you're paying only 15 or 25% of your income on taxes.

"You may make more money, but bring less home," said Patton.

John Kennedy, a financial planner, says if your $5,000 away from the lower tax bracket - put that amount some where else.

"If I can do an IRA to get me under than number then I'm saving 25% of that," said Kennedy.

Now look at your tax return again. Did you get a big refund? You shouldn't be.

"You're allowing the government to use your money interest-free over that year of time," said Kennedy.

A few calculations can figure out what you should really be with-holding from your paychecks.

"Go back and take a look at your W-4s and see how many deductions you're actually taking out," said Patton.

"Then you have the utility to use that money through the year and not the government," said Kennedy.

If you're invested in active mutual funds or trading often on the stock market - short-term capital gains are taxed as regular income. Kennedy says there's alternatives for better long-term results.

"You may want to do something that's tax free: municipal bonds or something like that," said Kennedy.

Gus Patton from Liberty Tax Services advised keeping all tax returns for three years and to bring them with you on future tax preparation appointments.

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