Get a Jump on Next Year's Taxes

What? Did you think because you filed your taxes last month that you could just forget about it and look forward to the summer?

Just because tax season has ended and baseball season has begun (as the mother of a little leaguer, it's the longest season ever!), don't be so quick to file away your return and put taxes out of your mind.

I know -- the last thing you want to do is think about your tax return -- especially with the return of warm weather and Roger Clemens (no doubt his accountant is still hard at work).

But your tax return is actually your best planning tool for 2007. Especially if you got a big refund (shame on you for lending Uncle Sam your money) or owed big, your 2006 tax return can help you prevent the same mistakes this year.

So let's walk through some of the line items on your 2006 return and determine where you can make some adjustments.

Wages and Withholdings

Go to line 7 of your Form 1040, your W-2 wages. While your wages are fully taxable, the best way to minimize that tax hit is to max out your 401(k) contributions. I know it's trite, but remember, those contributions come out of your paycheck before your tax bill is calculated. So getting that money out of your paycheck and into your 401(k) could help bring down your taxes due.

For 2006, you can contribute up to $15,500. And if you're 50 or older before Dec. 31, your contributions jump to $20,000. So step up your contributions.