Tax Planning Strategies and Tips - TurboTax Tax Tips Video

Hello, I'm Sara from TurboTax with some information about the importance of tax planning. Wouldn't you like to pay the least amount of income tax possible? This may not be possible unless you plan ahead of time. By the time you sit down to prepare your tax return it is too late to maximize your income tax savings. You need to start planning when the tax year starts and sometimes even before then. Effective planning begins with an awareness of the tax rules that may effect you. Your goal should be to familiarize yourself with the eligibility requirements of each potential tax credit and deduction. This way you can make sure you are on track throughout the year to claim every credit and deduction you deserve. Let me give you an example. Students can claim The American Opportunity Credit which reduces the amount of tax they owe for education expenses. One of the requirements is that you enroll in school at least half time. Now if your school defines half time as two courses per semester, you can plan accordingly to ensure you remain eligible for the credit. But if you are not aware of this requirement and take only one course during the year you end up paying more tax than you needed to. Although knowledge of the tax rules is the most important part of tax planning, make sure you also keep adequate records in case the IRS requests proof and periodically check for updates to the tax laws. For more tax tips and guidance, visit TurboTax.com.

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