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May: Time to focus on flowers, showers & tax moves

Hey, May. You're supposed to be all about the flowers from last month's April showers. You can stop the rain and more any time now.

Bluebonnets etc tractor closeup Willow City Texas Loop 040416Bluebonnets and more in a Central Texas field along the Willow City Loop. Photo by Kay Bell; art direction by the hubby.

Yep, that old climatological adage is not quite accurate. May also brings plenty of showers. And hail. And tornadoes.

That trend seems to be on track this year. Just two days into the month, and severe weather has moved from Central and flooded East Texas, where Houston was declared a major disaster area, into the South and Midwest.

If weather history holds, folks in the Eastern half of the country better hunker down for a stormy next 30 days or so. And things don't let up; as summer arrives, so does the Atlantic hurricane season.

Stormy Monday and beyond: That's why I'm kicking off the 2016 version of May Tax Moves with a recommendation that you get ready for the peak of twister season.

If you happen to sustain storm damage, you might get some tax breaks. It doesn't make up for weather woes, but any help after a disaster is welcome. You can find details on preparing for, recovering from and even helping out storm victims on the ol' blog's special tax-related (of course!) Natural Disasters Resources page.

With that out of the way, you can focus on other tax tasks to take care this month. Here are a couple of things to thing about this May.

File ASAP: If you missed your April 18 or 19 filing deadline, you need to file as soon as possible. This is the only way to stop the accruing of costly penalties and interest.

If you got an extension to finish your return, remember that you don't have to wait all the way to Oct. 17 (yes, that deadline is later this year, too) to file. The Internal Revenue Service will gladly take your 1040 any time before then.

And you still might be able to take care of this task at no cost. Free File is still available for folks with adjusted gross incomes of $62,000 or less.

Maximize work tax opportunities: This month kicked off with May Day. This celebration of workers is not as big a deal here as it is internationally, but it's still a good reminder to take care of tax issues at your job.

This includes adjusting your withholding if you got a big refund this year or, conversely, owed Uncle Sam a lot. It's easy. Just give your payroll office a new W-4. The IRS even has an online tool to help you calculate your appropriate withholding amount.

If your new withholding means you get extra cash each payday, consider putting that amount into your workplace retirement account. Again, all it takes is a stop by your benefits office. If your employer matches your 401(k) contributions up to a certain percentage, make sure you put in at least enough to get the boss' full contribution.

Taking care of Mom and taxes: On this upcoming Mother's Day, check out a tax-related gift for yourself or your spouse. If in addition to taking care of your kids, you're also helping out your own aging mom, look into whether that double duty could provide you some tax breaks.

When an elderly parent (Dad as well as Mom) qualifies as your dependent, you get an added exemption claim on your tax return. Basically, you still have to provide more than half an aging parent's support in order to get his tax break, but you do get a little leeway.

Mom and/or Dad don't have to physically live in your house. Payments you make toward their separate housing, either their long-time residence or an assisted living facility or a nursing home, count toward meeting the tax-mandated support level.

More May tax moves: I know May is hectic. For many folks, the school year wraps up, meaning all the crazy fun involving proms and graduation ceremonies.

Then there are the plans you have to make for the summer, from camps for the kiddos to your annual family vacation.

May_tax_moves_160But also schedule some time for tax-saving tasks. You'll find more in the May Tax Moves feature over in the ol' blog's right column. Just scroll down a bit and look for the red lettering under the countdown clock ticking off the remaining filing extension days and hours.

Once you've taken tax steps this month that apply to your circumstances, reward yourself with some of those gorgeous May flowers. You deserve 'em!

Comments

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Himani Sharma

The post is written in very a good manner and it entails many useful information for me. I appreciated what you have done here. I am always searching for informative information like this. Thanks for sharing with us.

Neeraj Bhagat

Thanks Kay for some tax saving tips. It's time to reduce the tax burden and to pick some flowers from the garden.

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