Smart Tax Tips For Year-End & Beyond
This provides detailed information on several clever end-of-year tax strategies and planning tips for the future. Consider these methods if you’re looking for quick ways to get started before the year ends.
Reducing your income on paper can lessen your tax burden. This tax planning strategy can look like donating to charity, contributing to retirement funds, or even shifting assets to family members — usually children that don’t have taxable income. Organize whatever methods you want to use early to reduce your federal tax levels.
Tax Loss Harvesting
Investments that lose money can benefit your taxes. If you sell these investments before the year’s end, you can write them off as losses and put those funds into a similar investment. This strategy allows your losses to offset some of the gains made by other investments, helping you pay less in taxes overall.
Charitable Gifting Account
Each year, you can give up to $300 if you’re single and $600 if you’re married to charity and avoid paying taxes on that sum. However, if you’re unsure which charity you want to support, you can set up a charitable gifting account where the money stays tax-free until you donate it. Establishing these accounts can take time, so start looking into it right away if you’re interested.
Contributing to Retirement
When you put money in your IRA or 401(k), you can take that value out of your taxable income. Contributing to retirement is one of an experienced accountant’s favorite methods, as the money you put into these accounts compounds over time. If you’re contributing to a company-sponsored plan, you might also benefit from your company matching your additions. However, if you’re within two years of qualifying for Medicare, know that making significant changes to your retirement accounts can affect your premiums.
Learn More About Fort Pitt’s Financial Advisory Services
The best strategies for saving on taxes are often combined with other steps you can take to secure your financial future. At Fort Pitt, our only goal is to ensure you have the necessary tools and knowledge to make sensible choices that further your money goals. Our financial advisors are ready to help you, your business and your loved ones manage your portfolios, understand your investments, and much more. Contact us today and watch your financial situation transform.
Please note that Fort Pitt Capital Group is not a tax advisor. For the most up-to-date information on end-of-year tax planning, contact your accountant or another tax professional.