Tax savings is a peculiar planning topic. It’s an idea that almost everyone wants more of, but few follow through to complete it.
Most people don’t realize the large amount of tax savings they could have by making a few simple tweaks. Instead they operate under the “penny wise, pound foolish” mantra. Missing substantial savings to save the cost of a professional.
By performing professional tax planning towards the end of the year, there is often thousands in tax savings available.
Whether its extra deductions being missed or lost opportunities in tax-favored investment accounts, in this week’s show we describe ten tax tips that can save you money before year-end.
Top 10 Tax Tips
- Determine your tax bracket and decide if it’s better to defer or accelerate income.
- Use appreciated stock and donor-advised funds for charitable gifts.
- Take advantage of tax-loss harvesting for deductions against higher income brackets.
- Use a Healthcare Savings Account for triple tax savings.
- Increase your 401k/403b contributions to max if in 25% tax bracket or higher.
- Delay or accelerate itemized deductions (mortgage or property tax payments).
- Beware the AMT tax and defer income to avoid higher tax this year.
- Complete a Roth IRA Conversion if in lower tax bracket.
- You could be paying 0% in capital gains tax.
- Hire a professional to walk you through this check list.
Facts and Links Mentioned In the Show
- Why a Health Savings Account May Be Your Best Savings Account
- Strategies to Reduce the AMT Tax Burden [Kitces.com]
- Tax Loss Harvesting: When Investment Losses are a Plus