You can diagnose more about your financial health by looking over your tax return than by any other source. A careful review of your 1040 can provide vital information about your cash sources and uses, and your discretionary income.

Identifying your discretionary cash flow can help you make important financial decisions. For example, if your total annual savings doesn�t approach 15% or more of your income, you may want to allocate more discretionary cash to funding your retirement.

To arrive at your discretionary cash flow look at your 1040 and tally the income items for which you received cash.

These should include wages, salaries or self-employment income; interest and dividends (including tax-exempt interest and reinvested interest and dividends); and other investment income. Don�t include capital gains. Add cash sources that weren�t taxable or that didn�t appear on your 1040, such as insurance reimbursements.

Next, total your cash uses. These include individual retirement plan or (self-employed) tax-qualified retirement plan contributions, medical costs, taxes, interest costs and charitable gifts. If you itemize deductions, many of your cash uses will be on your Schedule A form.

Include any cash uses that don�t appear on your 1040, such as principal and non-deductible interest payments (on all debt) as well as insurance premiums, education and household expenses. Add this figure to your income tax obligation listed on page 2 of your 1040.

Now, for the grand finale. Subtract your uses of cash total from your sources of cash total to arrive at your discretionary cash flow. This is the money you have available for consumption, debt reduction, and savings and investments.

Use your 1040 to give your finances a thorough checkup each year.