Halloween is over. Thanksgiving is around the corner. And before you know it, the year will be over!
Lots of people only start to focus on their finances as part of their New Year’s Resolutions. But by waiting so long, they don’t realize how much money their leaving on the table by not becoming as tax efficient as possible.
“What’s the point?” You might ask, “I haven’t kept receipts or done anything during the rest of the year. Isn’t it too late to try anything?”
Good news! There are some steps you can take before the end of the year to make sure you’re keeping as much money in your pocket as possible come tax-time.
Consider taking these steps before the year’s over.
Photo by Kelly Sikkema on Unsplash
It’s well known that you can make contributions to your IRA or Roth IRA up until Tax Day. However, that same deadline doesn’t apply to all retirement accounts.
If your employer gives you access to a retirement account, like a 401k, 403(b), or 457 plan, you must make your contributions by the end of the year.
That means there’s still time to look at your contribution rate. If you’re not going to reach the annual limit for the year ($19,500 for 2021, plus $6,500 for people over 50), you can increase how much you contribute through your paycheck each week to get as close as possible.
It might cause a bit of a pinch, but come tax time, you’ll be grinning ear to ear with a larger refund.
In the season of giving, your giving can give you a return.
Up to $300 cash contributions are tax deductible for individuals, and $600 cash contributions for married couples filing jointly.
So if you’re making a cash donation, don’t forget to keep your receipt!
Loser stocks are actually winners!
Here at Plan & Act, we LOVE stocks that have lost value. Why? Because they’re great for your taxes.
If you have a stock that’s lost money, you can sell it before the end of the year. Up to $3,000 can be used to offset other income you’ve made. On top of that, any losses over $3,000 can be carried over to the next year to offset future gains/income!
These are some of the most common opportunities, and depending on your financial situation, there might be other opportunities for you to save on taxes before the year ends.
If you want an expert to help you find the most effective way to protect your wealth from taxes, schedule a call today. Click here to sign up for a FREE Bronze Account, and one of our financial advisors will reach out to set up a tax consultation meeting.