Avoid over-withholding in 2016 by increasing the “number of allowances” on Form W-4. Remember to change to the proper “number of allowances” at the beginning of 2017.

Be prepared to file the 2016 Federal income tax return early to obtain a refund. The refund can be hastened by labeling the envelope containing the return “REFUND” and using the appropriate post office box number. Alternatively, electronic filing will also shorten the time between filing and receiving a refund. Use of the direct deposit option is also recommended.

Determine and document the source and reason for all interest payments during
2016. Pay particular attention to loans used to pay qualified education expenses
since up to $2,500 of interest is deductible when computing Adjusted Gross Income.

Prepare and maintain a record of the expenses involved in moving to the first place
of employment. These include: the actual moving expenses; travel and lodging
costs incurred en route to the place of employment.

Familiarize yourself with the types of deductible expenses incurred as part of your
employment. Prepare and maintain a record of these expenses which can include
travel, meals, lodging, entertainment and educational costs. Also, if possible, insist
on specific item reimbursement instead of a general allowance system.

Don’t attempt to itemize deductions unless you’ve incurred substantial
unreimbursed medical costs, state and local income taxes, home mortgage interest,
real estate and/or personal property taxes during 2016 and expect this total to
surpass the 2016 standard deduction amount for your filing status.

Claim the American Opportunity Tax Credit or Lifetime Learning Credit for 2016 tuition and fee payments (including prepayments) made to any “eligible educational institution.” Alert your parent(s) to the eligibility requirements that may allow the reporting of the American Opportunity Credit on their 2016 tax return.

Examine situations that would enable you to recognize income in 2016, instead of 2017. Where possible, shift that income into 2016.

Protect the dependency exemption of your parent(s) by (a) documenting your support spending before and after you are employed and (b) spending less on your support from your funds than the amount spent by your parent(s) and others who provided resources for your support.

When you are not reported as a dependent by your parent(s), document the relationship of educational expenses to (a) requirement established by state or employer or (b) maintenance and/or improvement of skills required in your current trade or business. Following an up to $4,000 Tuition and Fees Deduction, determine whether your tax liability is reduced more by treating the remaining eligible educational expenses as a miscellaneous itemized deduction or by using all of the educational expenses in computing the Lifetime Learning Credit.

Do not waste precious time and space maintaining information about spending that
has no tax consequences. Furthermore, tax returns and the supporting data should
be kept for at least three years.

Establish an IRA (Individual Retirement Account) or similar retirement arrangement — such as a 401(k) Plan – as soon as possible. Contribute the maximum amount to the IRA and allow it to grow until retirement.

I hope this information is helpful. If you would like more details about these or any other aspect of the tax law, please do not hesitate to call at (760) 237-4000 or e-mail at


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