Better Position Yourself Before April 15

Don’t wait until year’s end to begin deferring income into a retirement plan. If you wait to make a lump sum contribution at the end of the year, you could be missing out on returns throughout the year.

If you received a large refund this year, review your federal and state withholding forms now to make sure they reflect your current situation. For example, did you get married? Did you have a child this year? Did you buy a home? If the answer to any one of these questions is yes, you may need to update your W-4 form (Employee’s Withholding Allowance Certificate). The W-4 has a worksheet to help you figure out how many personal allowances to take, based on projected deductions and tax credits. Use the IRS online withholding calculator at http://www.irs.gov (type “withholding calculator” in the search box).

Give throughout the year. “Develop a systematic plan for cash gifts to charity,” Abercrombie said. “Twenty dollars per pay period is easier than $520 at year end.” Besides, charities need money all year long.

If you plan to buy a home, the earlier in the year you purchase the better. This will allow you to have more mortgage interest to deduct.

Keep track of your unreimbursed business expenses. If you want to avoid the maddening quest to find all your receipts at tax time, set up a file folder or dedicate a kitchen drawer in which you can toss the information.

If you work from home, designate a set space for the home office. If you do this, you can apportion a number of expenses to the home office space. But maintain proper documentation for any expenses that you would take, Abercrombie said. On this issue, you may want to consult a tax adviser to determine the appropriate expenses.

If you are self-employed, make quarterly estimated tax payments to the federal and state government on schedule. “Some clients make federal but skip the state,” Abercrombie said. “This may subject you to penalties for underpayment of tax.” Keep in mind, state tax payments can be used in your itemized deductions for federal taxes. line withholding calculator at http://www.irs.gov (type “withholding calculator” in the search box).