Just when you think you finally understand certain taxes they are changed. If you were planning on taking a certain tax credit two years from now it may no longer exist. Tax laws come and go. This is something that we've come to expect. But once a new tax law comes into effect you need to see if it applies to you and if you can take advantage of it. Here are some tips to help you succeed.
Those annual tax books that come out every year will generally list the latest tax rules that are in effect. You want to get the most recent version. You need to list out every tax rule that might apply to you. You'll need to know what you can take and what you can't. You need to keep this somewhere that you will be able to get access to. This may take some initial legwork but it will pay off in tax savings for you.
What you want to do is create a spreadsheet for each tax law that applies and underneath input what you estimate your tax savings might be. You also want to include the expiration date of the rule if there is one. Some laws are only valid for a couple of years and others are good until they vote them out. If they renew tax credits or deductions that's great but don't anticipate that happening. You need to know exactly when they are no longer valid.
If you own tax preparation software it too might list new tax changes or even contain a tax directory or guide as a bonus. Make sure that you take full advantage of it. These will also get updated every year and you can deduct them on your taxes.
For those of you that take your taxes to a professional to prepare you'll still want to keep up to date on the laws as they may not know what may apply to you. They will ask you many questions to try and find that out, but in case they miss something you can bring it up. It is utimately up to you to make sure that you take full advantage of the tax laws and the changes that occur. It could be the difference between getting a refund or paying more money.