Year-end tax planning can significantly reduce taxes due for the year or even increase the size of possible refunds. With the end of 2013 just a few days away, the time for taking action is dwindling but there are still some opportunities available:
- Charitable contributions are always a good way to reduce taxable income. They are claimed under itemized deductions and, depending on the size of the contribution, can help reduce your taxable income. Besides, you’ll feel great knowing you’ve given to a qualified public charity for a cause you believe in. Be sure to keep your receipts.
- Contribute to your qualified retirement account. Retirement plans such as 401Ks must have contributions completed by December 31 in order to be used for 2013 tax purposes. IRAs on the other hand can be established and/or contributed to as late as April 15, 2014 to still qualify for use on your 2014 taxes. That’s a great deal.
- Gifting of cash or property is not deductible on your tax returns but if the gift is $14,000 or less you will not be required to file a gift tax return and the gift will not be taxable.
- If you are disorganized with your tax filing system, think about getting started pulling your documents together. It’s not just a convenience for your tax preparer, you could also be missing out on deductions if you have misplaced important receipts.
Have a great holiday and give us a call if you have any questions!