2017 is rapidly approaching its end. You know what that means: it is almost tax time again. In order to prepare and get the most from your taxes, try using one of these seven moves.
1. Donate to Charity
Charitable donations are tax deductible, which means you could be saving money and making the world a better place at the same time. Just ensure the organization is IRS-approved before you make your donation.
2. Tax Breaks for Homeowners
You are eligible for multiple tax breaks if you own a home. For example, if you itemize your taxes, you can deduct mortgage and property tax interest. This way, if you pay your mortgage for January before December 31, you can deduct the interest on your payment on your 2017 taxes.
3. Pay Higher Education Bills
If you or your dependent is currently enrolled in a higher education program, try to pay the bill before 2018 begins. This will allow you to claim the Lifetime Learning Credit or the American Opportunity Tax Credit.
4. Contribute to Your Retirement Fund
Putting money into your company’s 401(k) or retirement plan can help you now and when it comes time to retire. Generally, the money that you put into your retirement fund is not taxed. This means that your income (and the income taxes you must pay) will be lower.
5. Open an IRA Account
In addition to taking advantage of your company’s retirement fund, you should also open and contribute to an individual retirement account like an IRA. You will be able to deduct a part of your contribution amount.
6. Ensure You Meet Healthcare Requirements
You will need to pay a fine if you do not have health insurance or your current health insurance does not meet the legal requirements. This fine can cost a couple hundred dollars or more if you have a large family and it is due when you submit your 2017 taxes. Double check your coverage now and ensure next year’s insurance meets the requirements, too.
7. Postpone Any Excess Income
This is an especially effective strategy if you are about to cross over into a higher tax bracket. Don’t sell any assets that create a capital gain. Ask your boss to pay you your bonus in the new year. If you are self-employed, send out your end of the year invoices in January.
Getting the most back from your tax return requires a lot of hard work and knowledge. Luckily, the professionals at Foster Financial CPA are here to help. For assistance preparing your taxes or any other financial matter, contact us today.