Even though December is almost over, itâ€™s actually not too late to lower your taxable income and increase your tax benefits. Follow this year-end planning tips to help save money in the new year:
1.Max out your contributions:
If you have a 401k, health savings account, or an IRA, right now is a great time to contribute as much money as you can before the end of the year. You will not only lower your taxable income, and you will be thankful of the benefits in the long run. Through your employer or on your own, contributing to a retirement fund is always a good plan. You can contribute up to $5,500 and up to $6,500 if youâ€™re over the age of 50 annually.
2.Capital Investment Loss:
Itâ€™s never an easy decision cutting ties with your poorly performing investments, but sometimes it can help to reduce your taxable income if youâ€™re willing to incure the loss. However, if your losses outwgih your gains, you can use up to $3,000 to offset your regular taxable income.Â Keep in mind that the IRS wonâ€™t let you claim the loss on your taxes if you buy back the stock within 30 days of taking the loss.
3.Increase Your Business Expenses:
Another element of reducing your taxable income is purchasing anything that you might need for your business. Eliminating funds and creating new items to add as business deductions on your taxes is a great way to use what you have and make smart business choices at the same time.
4.Utilize the Time Remaining:
You might feel like you are out of time to do anything before the tax season is over â€“ but donâ€™t worry, there are plenty of small things to do before the end of the year that will help immensely come next yearâ€™s tax season. Use the remaining days to get on track and keep everything in order. Also, use your tax consultants to know the latest tax laws and provisions
Use your Denver accounting experts to help you understand how you can make the smartest choices for your business. Our team can review your documents and information and provide you with the best solution for your business. Even if you feel like you have run out of time this year, get yourself better prepared for next year and implement a tax plan.
Contact Bloch, Rothman & Associates
today at 303-321-7160
and set up your free consultation for the new year.