Tax Planning for Next Year
It’s finally done, and your tax return is off to Uncle Sam. It’s time to put your feet up and celebrate a job well done. At this point, the last thing you probably want to think about is next year’s taxes, but a little planning now could save you headaches (not to mention dollars) down the road.
If you’re working for someone else, it’s still early enough in the year to adjust your withholdings. By increasing or decreasing the amount of tax deducted from each paycheck, you can take direct control over the size of your refund.
One of the advantages of putting money into a traditional IRA is that you can make contributions all the way up until tax time to reduce your taxable income. But why wait? Invest that money now and let it go to work on your retirement funding right away.
If you’re a small business owner, you probably already know you can deduct most of your expenses. And if you’re anticipating a big year, it might be a great time to make some investments in your company. You’ll be glad you did when tax times rolls around again.
Before you sell any major assets such as your home or a rental property you own, check the tax laws to see if you’ll have to pay on the gain. Tax time is stressful enough without any nasty surprises.
Don’t forget the state return as well, particularly if you’ve just moved into that state. Many taxpayers miss out on important credits available to them at the state level.
As always, take the time to consult with your accountant or tax professional to see how each of these strategies might work for you.