Whether you got a raise this year or started a family, here are some top tax year-end tax tips to think about before the holiday season rolls around.
1. If possible, defer your income -- this makes a lot of sense for self-employed people as you can bill late in December, ensuring payment in the next year. If you work for an organization that has bonuses, perhaps you can defer your bonus until the next year. Remember, this is only strategic if it helps with the tax bracket you fall into. Consult us (or your accountant) before making this move.
2. Contribute to a charity -- putting your dollars towards doing good accelerates your deductions for the year. Just keep your receipt from the charity and you will be golden. If you have property to donate, you can deduct the property's value and avoid paying capital gains. If you have no charity to support, consider paying a medical bill for a deduction, as long as you have documentation. We can tell you if these types of financial decisions make sense before the end of the year so you can plan ahead.
3. Contribute the maximum to your retirement accounts -- because this money is often matched by an employer, it may be the best way to create a bigger deductions.
With the end of the year fast approaching, now is the best time to consider what to do with your funds to create the biggest impact on your tax return. Consult us at Beyond Accounting today so we can help! We're here to assist in creating a better future for you and your family through accounting best practices and tax tips.