When it comes to filing your taxes, are you scrambling a few days or perhaps the night before they are due? Hey, there is no judgement over here – we get that life happens and filing could easily be pushed off.
We know you already know this, but… there is a better way. In fact, if you start thinking about taxes before January 31, you could be saving yourself some money when it comes to time to actually file.
Not quite sure where to start or how you could be saving? No problem. Our seasoned accounting team put together our top seven things you could be doing before the end of the year, in order to maximize your tax saving.
Compare Itemized and Standard Deductions
Do a checkup on your deductions to shift your money around. If you can itemize deductions this year, make your charitable donations in December rather than wait until January.
If you aren’t close to the limit, wait until next year to start accumulating items to deduct.
Watch Your Flexible Spending Accounts
Don’t wait until the very end of the year to think about spending your health savings accounts. Schedule appointments now to get glasses or hearing aids. Know the deadlines for using up your money.
Bottom line: spend that money on healthcare instead of losing it.
Check Your Medical Deductible
Keep track of your medical expenses to know where you stand on your deductible. If you’re getting close to the limit, you may want to have those necessary procedures before the end of the year. Also, you can deduct a certain amount from your taxes if they meet the threshold.
Make Contributions to Your Retirement Account
One way to reduce your tax bill is to add to your retirement account. You have to make contributions to your 401(k) before December 31, though. You do have longer with some plans. It pays to check on it now.
Donate to Charity
Charitable donations given before January 1 are deductible on your return. Get a receipt for the current fair market value. FMV is what you could sell it for at a yard sale.
Give a Gift
You can gift someone up to $14,000 without paying gift tax. Remind the recipient to deposit the check or cash it by the end of the year to complete the transaction. If you’re married, you can each give the maximum, or $28,000 to a loved one.
Sell Your “Losing” Investments
If you have any capital gains this year, you may want to offset those taxes by selling your investments that are losing money. You can use up to $3,000 in loss to offset other income. It may not sound like a lot, but it could help your bottom line.
Work With Orlando’s Top Accountants
Have questions about your taxes? Avoid the April rush and get answers now from KDK Accountancy about your end-of-year taxes to make your money work harder.
Contact us online or call our team directly at (407) 759-5363 today!