2017 Tax Saving Tips

1449682336280Year End Tax Saving Tips

As the year comes to a close, there are several tax saving strategies that could possibly help save you money when you prepare your tax return. Please note that these tax saving strategies will not apply to everyone and there are many other options not listed in this article. Check with a professional CPA to see which strategies will work best for you.

Tax Saving Income 

Most small businesses are taxed on a cash basis on income they receive. If you are self employed, you can defer payments by simply delaying billings until close to the end of the year. You won’t be taxed this year on what you receive after January 1st.

Tax Saving Expenses

Any deductible payments you make before December 31st are deductible on this year’s Tax Return. Medical Bills, Mortgage payments, Property Taxes, Business Expenses are all tax deductible. Even if they aren’t due until next year, making a pre-payment of one payment of each type will apply to this year’s deductions.

Charity Donations

Donating cash, property, clothing, household items, or other goods is a great way to get a tax break and help a worthy cause at the same time. If you donate to an eligible charity this year, you can generally deduct the amount you contribute when you prepare your taxes for April.

Important Reminder: Under the pension Protection Act, as of January 1, 2007, you need a written receipt for all charitable donations, regardless of the amount. Make sure you save your receipts so you can take full advantage of your charitable giving.

Tax Saving Gifts

Up to $14,000 per individual may be given as a gift to as many people as you’d like and pay no gift tax. Paying for someone’s education, medical bills for others, or gifting appreciated stocks and/or securities are all eligible gifts. If gifting by check, make sure the check clears before December 31, as the gift is considered “given” the year the check is cashed.

Individual Retirement Accounts

Many are eligible to contribute up to $5,500 per year to a traditional or Roth IRA, but those over 50 years can contribute $6,500. Contributions can be made any time up to April 15 of the next year.  If you can swing it financially, raising your 401k contributions to the maximum amount allowed will really reduce your tax liability. You might also consider contributing year-end bonuses to a tax-deferred 401k account.

Your Personal Tax Saving Strategies

Everyone’s financial circumstances and needs are unique. It’s a good idea to carefully consider your options and consult an experienced professional when appropriate. Now is the time to think about ways you can reduce your taxable income.  Call (805)495-4211 to schedule your Year End Tax Planning & Accounting Review appointment.

Steven Z. Freeman, CPA and the staff at Freeman and Associates provide Business Services, Tax Planning, Entity Formation,  and Accounting and can assist you with these services. If you have any questions on this matter, or to schedule an initial consultation, Please call us at (805) 495-4211.

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