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6 End-of-the-Year Tax Tips to Consider
As the conclusion to 2016 quickly approaches many business owners begin taking steps to sensibly lower their 2016 tax bill. December 31st can be as impactful a day for businesses as April 15th is to common tax payers as this marks the deadline for businesses trying to reduce what they owe for their 2016 income tax returns.
With that said, below are some possible tax tips to help you save on your tax return for this year and beyond:
1. Deferring Income
Deferring your taxes can make a significant difference and is pivotal to smart tax planning. Naturally, this would only make sense if it were to keep you in the same or lower tax bracket. You wouldn’t want to receive a heftier tax bill next year if the added income could put you in a higher tax bracket.
2. Loss Harvesting to Offset Gains
Loss harvesting is a year-end tax strategy to help you offset any taxable gains you may have realized during the year by selling investments that have realized losses like mutual funds or stocks. These losses offset the gains dollar-for-dollar.
3. Charitable Contributions
Charitable contributions could also help to reduce your tax bill, which you get to control the timing over. Keep in mind that contributions can range from money, vehicles, property, even stocks and bonds.
4. Bunch Your Itemized Deductions
Bunching itemized expenses helps to confirm if you are meeting the necessary income thresholds in order to qualify for some deduction categories. Although tedious, this is a great practice for the coming year as well as the current.
5. Contribute to Your Retirement Account
Another smart practice is contributing the maximum to tax-deferred retirement accounts, which can grow substantially over time tax free, until having to be pulled out.
6. Seek a Professional If Necessary
There truly is a lot to think about when it comes down to tax planning for the current and upcoming year. It would make sense to speak with a licensed tax professional that would be able to properly evaluate one’s business or individual situation to help them determine the course-of-action that makes sense
Could You Benefit from Expert Tax Tips and Guidance?
At Verdeja, De Armas & Trujillo LLP, our team of Miami accountants is dedicated to providing personalized, financial guidance. We provide accurate and comprehensive financial statements as well as in-depth business analyses specific to your business or personal needs. Contact us today for a consultation!