Last Minute Ways to Save on Your Taxes
It is never too late to save a little extra on your taxes. Even if the tax year is ending or if tax day is approaching, you can still take the time to run through a few potential ways to keep more money in your pocket this year (and in the years to come!).
1. Bonuses and Extra Income
If the tax year is coming to a close and you’re expecting a large bonus from your work, think about whether it would benefit you to receive this in the current tax year or next year. If you think that it would be helpful to ask your company to defer your bonus until the beginning of the year, that amount will not be added into your taxable income this year. Always keep in mind that this bonus WILL be counted in your income in the following year, you never get a “pass” where taxable income is concerned.
2. Retirement Contributions
Another excellent way to reduce the amount of taxes you will pay is to increase the amount you contribute to retirement and/or your IRA. Contributions made to your IRA are generally tax deductible in the year that you make the contribution. Best of all, you can make the contribution all the way up to tax day, so this is one of the best strategies for a truly last minute way to save on your taxes, all while saving for your retirement as well!
3. Consider Making a Necessary Business Expense Now
If you have the need for a large business expense coming up, make a strategic decision about the timing of the purchase. If you are looking for tax deductions this year, make the purchase by the end of the year so that it can be deducted. You can also defer the purchase if you think you’ll need the tax savings more next year. The key is to think this through and make the purchase at the time when it will benefit you most.
4. Take Advantage of Pre-tax Spending Opportunities
It is always a great time to look at how much of your income you are putting away into pre-tax spending plans – like a tuition plan for education expenses or your health savings account.
5. Home Office Expenses
If you have a true home office, you should look into the simplified home office deductions that allow you to take a $1,500 deduction based on $5/sq. ft. for up to 300 square feet of your home.
6. Go Green
The IRS is encouraging taxpayers to go green. You can receive a sizable tax deduction for installing alternative energy equipment. There is no maximum to what you can deduct in this area up to 2016.
If you are looking for more last minute ways to save yourself some cash this tax season, consider partnering with a tax firm who knows the business inside and out. Success Tax Relief has been working for more than 30 years to save our clients both time and money. Contact us today to discover what we can do for you!