End-of-year tax planning tips

Nov

14

November 14 , 2014 | Posted by John J. Hartnett Jr | No Comments

End-of-year tax planning tips

 

December 31 will be here before you know it. There’s a list you want to check twice before the holidays and it’s not the ‘who’s been naughty and who’s been nice’ list. It’s a ‘Tax Tips’ list. If you don’t have a year-end plan in place, End-of-year tax tips from Capital and Worthnow is a good time to gather paperwork together so that you’re not rushed before the clock strikes 2017.

Run a preview. Before the end of the year, run an estimate using a tax calculator. If you wait until the New Year, it’s often too late to go back and make changes.

Increase your retirement plan contributions. Contribute more to your 401k, 403b, and SIMPLE (Savings Incentive Match Plan for Employees) by the end of the year to reduce your taxable income and your tax bill.

Prepay your mortgage and real estate taxes. Even if your payments aren’t due until January, you can pay them in December to deduct this year, if you itemize.

Close, fund, or convert your IRAs. Which option is right for you? It will depend on the performance of your IRA, and additional funds you may be acquiring before the year ends (think bonus). If you are the owner of a traditional IRA, you may want to convert all or part of the funds to a Roth.

Use your flex spending money. The use-it-or-lose-it rule makes your money disappear if you don’t use it. It’s also a good time to remember to enroll in your 2017 flexible spending account if you haven’t done so already.

Donate. But be sure to research the charity to make sure you know how your donations will be used.

Don’t delay addressing your own year-end ‘Tax Tips’ list. After all, we all want to end up on the IRS’ ‘nice’ list.

 

Need some advice about your list? Contact Capital and Worth today.

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