Tax Tips To Think About Now
As the holiday season comes to an end, tax season is right around the corner. While we all know that April 15th is the main date for taxes, there are some things you should do before the tax year ends to make sure that you pay as little as possible and get as much money back as you can. Keep in mind a few of these tax moves that can save you some money as the year draws to a close.
- Defer income. If your remaining pay for the end of the year will push you into a different bracket for your taxes, consider deferring your income. Maybe ask your boss to hold your bonus until January, or wait to sell assets that would have a capital gain. This can save you some money on your taxes.
- Build up your 401K. Putting more money into your 401K plan can help make taxes more bearable. The money that you put into your 401K is added before the taxes are taken out, so you have less income that the IRS can tax. An added bonus of doing this is that the more money you put into your account now, the more you can earn off of that money.
- Home-ownership. Owning your home can provide a variety of tax breaks that can reduce your current year’s tax bill. If you pay your January mortgage before the 1st of the year, you can deduct the mortgage interest on your tax return.
- Give to charity. Charitable gifts to organizations that help the less fortunate not only make you feel good and benefit the community, but they can also reduce your tax bill. Be sure to keep track of the dollar amount of any donations you make (whether it was a money or item donation), so that you get the most benefit on your taxes.
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