The Daily Deduction

Fall Forward: 4 Quick Tax Planning Tips To Save You Money at Tax Time

9-23-2013_fall 

If you’re like most taxpayers, you prefer to only think about taxes that one time of year when you have to. With proper tax planning advice, you can learn how you can save money and make qualifying for deductions or credits easier at tax time. With a little planning, it’s possible to pay only what you legally owe — and not a penny more.

  1. Plan Ahead - Know what expenses will you have for the year and what expenses can result in tax credits and deductions. Plan your charitable contributions early. Assess your business purchases or think about making an early mortgage payment to grab an extra month’s worth of interest deductions.
  2. To Itemize or Not To Itemize? - Know the Answer to This Question Eligible tax deductions include charitable contributions, mortgage interest, job hunting expenses, medical expenses over a certain amount of your income, and a number of other expenses. Start accumulating those receipts and amounts today so that you can save more money and have your data ready to go when you file your taxes.
  3. Stay Organized - If you have legitimate documentation of it, you can claim it. But what if you received that charitable deductions receipt 6 months ago? When it comes to taxes, it’s all about good and organized records. You need to have a good idea of what you’re spending money on, and you need to be able to prove to the IRS that you deserve a tax deduction or credit. Organize your records now to save space, time, and money. Download our Get Organized Quickly Checklist!
  4. Make Tax-Smart Moves With Your Investments - If you have investments that you want to sell, make sure you go about it in a strategic manner. When you sell something for gains, you will have to pay taxes on those gains. You can reduce the amount that you have to pay in capital gains taxes by offsetting your gains with capital losses. If you have some losing investments that you want to get rid of, you can sell them and deduct the losses. If and when you do sell, be sure to set aside the appropriate amount for taxes. It might also be necessary for you to pay quarterly estimated taxes depending on your tax situation. Finally, consider donating appreciated stock instead of cashing it out if your financial situation permits.
Posted To: The Daily Deduction By: Lauryn on 9/23/2013 02:20:00 PM
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