While we're only a little more than a full month into 2008, this is the best time to get organized and begin planning for 2008 taxes. By now you have probably received most, if not all of your tax documents in the mail. These include your W-2 and 1099 forms, mortgage interest, property taxes, student loan interest, and so on. If you haven't received them by now, you should be getting them very soon. Even if you don't plan on filing or paying faxes until April, don't just tuck these documents into a folder and wait. Use this time to estimate how much of a refund or tax bill you'll have, and then use this information to begin planning now for 2008 taxes.

Estimating Your Taxes

Estimating your taxes only takes about three or four minutes using the TurboTax Tax Estimator Tool. This tool asks very basic questions about income, taxes withheld, and deductions that can be found on the forms you received in the mail. At the end of the worksheet, it calculates your estimated refund or taxes owed. While this is clearly just a rough estimate, it can provide tremendous insight as to plans you can make now for the 2008 tax year.

For example, if the tool shows that you will likely owe a few thousand come April, this means one of two things:

• You need to start now to save up so that you can pay in full by April 15th.
• You may not be withholding enough. Time to review your W-4 exemptions.

On the other hand, if you find that you're likely due a hefty refund, it again means one of two things:

• You are withholding too much. Time to review your W-4 exemptions.
• You probably want to file your return sooner rather than later so you can put this money to good use.

Make Changes Now to Minimize the Impact on Your Bottom Line

It can really pay off to plan and make changes this early in the year. If you have determined that you need to begin withholding more for taxes so that you don't owe Uncle Sam anything come next year, it is a lot easier on your wallet if you spread the additional withholding across 10 or 11 months instead of having to come up with the extra money at the end of the year.

The same thing applies even if you're expecting a large refund. When you make the changes early on, you're putting more money in your pocket every paycheck across the whole year. This ensures that the government isn't getting a free loan on your money, and you can put that money to good use by earning interest in a savings account, contributing to a retirement plan, or even help pay off that credit card debt faster.