If you’re like most taxpayers, you prefer to only think about
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.
- 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
- 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.
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!
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.