Tax Planning Tips to Help You Maximize Your Savings

Tax Planning Tips to Help You Maximize Your Savings 

As the end of the year approaches, it’s time to start thinking about tax planning. With tax laws constantly changing, it can be difficult to know where to start. To help, here are 10 year-end tax planning tips to help you maximize your savings and get the most out of your tax returns. From maximizing deductions to taking advantage of credits and deferring income, these tips will help you maximize your savings and get the most out of your tax returns. Whether you’re a small business owner or an individual taxpayer, these tips are sure to help you maximize your savings and get the most out of your tax returns.
 
 
Maximize your deductions

Deductions are subtracted from your taxable income. This amount is used to calculate your tax liability. As such, it’s important to maximize your deductions in order to decrease your overall tax liability. Keep in mind that certain deductions are only available to certain types of taxpayers, including homeowners, small business owners, and individuals with certain medical expenses or childcare costs. Here are some of the most common deductions you should look into maximizing:

- Mortgage interest: If you’re a homeowner, you may be able to deduct the amount of interest paid on your mortgage. You must itemize your deductions to qualify, though. Mortgage interest is only deductible if you have a loan that is secured by your home, such as a home equity line of credit, as well as a traditional mortgage. Be sure to check with your lender to confirm you qualify for this deduction.

- Property tax: Your property taxes, as well as your mortgage interest, may be deductible if you itemize your deductions.

- State and local taxes: You can deduct state and local taxes, including property taxes and state income taxes.

- Education expenses: If you’re paying for a child’s education, you may be able to deduct those expenses as a tax deduction. Be sure to keep receipts for tuition, tutoring, books, and more to be sure to take advantage of this deduction.

- Healthcare expenses: If you or your dependents have certain medical expenses, you may be able to deduct them on your taxes. This includes expenses such as co-pays, prescription drugs, out-of-network medical bills, and more. Keep in mind, though, you will only be able to deduct the amount that is greater than 10% of your adjusted gross income (AGI).

- Charitable contributions: If you donate to a qualified charitable organization, you may be able to deduct the amount of your donation on your taxes. Keep in mind, though, you’re only able to deduct the amount that is greater than 2% of your AGI.

- Homeownership: As a homeowner, you may be able to deduct some of your expenses on your taxes, such as your mortgage interest and property taxes.

- Childcare costs: If you have a child under the age of 15 and are either claiming yourself as a dependent or are paying for another person’s childcare, you may be able to deduct these expenses on your taxes. Be sure to keep receipts for the care provider’s name and address, the dates and times the care was provided, and the amount you paid.
 
Take advantage of tax credits

Tax credits are subtracted from your tax liability dollar-for-dollar, meaning they can reduce your taxes owed by more than a deduction would. While deductions only reduce your taxable income, tax credits reduce your taxes owed. To claim a tax credit, you must complete form 1040, line 47, and check the box labeled “other taxes.” The following are some common tax credits you may be able to take advantage of for the coming year:

- Child and dependent care credit: If you paid for childcare in order to work or look for work, you may be able to claim a tax credit on your taxes. Claim this credit on form 1040, line 48, and check the box labeled “child and dependent care.”

- Education credits and deductions: If you or your dependents are in school, you may be able to claim education credits or deductions on your taxes. Claim these credits and deductions on form 1040, line 33, and check the box labeled “tuition and fees” or “student loan interest.”

- Residential energy credits: If you’re installing a solar panel or energy efficient appliances, you may be able to claim a residential energy credit on your taxes.

- Alternative Minimum Tax credit: If you’re subject to the Alternative Minimum Tax, you may be able to claim an additional credit on your taxes. Note that you should only claim the credit if you’re paying more in taxes as a result of the AMT.
 
Make estimated tax payments

If you’ve had a good year, you may be able to reduce your taxable income by making estimated tax payments. If you haven’t already, now is the time to start making estimated payments so that you don’t end up owing taxes by the end of the year. Be sure to keep in mind that the IRS charges interest on any unpaid taxes, so it’s important to make sure you’re paying your fair share. If you’ve had a good year, you may be able to reduce your taxable income by making estimated tax payments. 
 
Deferring income

If you’ve had a good year and want to reduce the amount of taxable income you have for the year, you can defer some of your income. This includes deferring any bonuses, profits from your side hustle, or other income. Keep in mind that you must report this income by the end of the year, but you’ll have extra time to pay taxes on it. Deferring income can help you reduce your taxable income and put off paying your taxes until next year. If you’ve had a good year and want to reduce the amount of taxable income you have for the year, you can defer some of your income. This includes deferring any bonuses, profits from your side hustle, or other income. Keep in mind that you must report this income by the end of the year, but you’ll have extra time to pay taxes on it.
 
Reviewing your investments

If you’ve had a good year and want to reduce the amount of taxable income you have for the year, you can defer some of your income. This includes deferring any bonuses, profits from your side hustle, or other income. Keep in mind that you must report this income by the end of the year, but you’ll have extra time to pay taxes on it. Deferring income can help you reduce your taxable income and put off paying your taxes until next year. If you’ve had a good year, you may also want to reconsider your investment strategy. For example, if you’ve had a good year, now may be the time to take a look at your investment portfolio and see if there are any changes you’d like to make.
 
Contributing to retirement accounts

If you’ve had a good year, now is the time to consider contributing to your retirement accounts. Doing so can not only help reduce the amount of taxable income you have for the year, but it can also help you set yourself up for a financially secure retirement. Keep in mind that you can’t deduct contributions you make to your retirement accounts in 2019. However, if you’ve had a good year, contributing to retirement accounts now can help you reduce the amount of taxable income you have for the year and set yourself up for a financially secure retirement. Keep in mind that you can’t deduct contributions you make to your retirement accounts in 2019. However, if you’ve had a good year, contributing to retirement accounts now can help you reduce the amount of taxable income you have for the year and set yourself up for a financially secure retirement.
 
Taking advantage of the earned income tax credit

The earned income tax credit (EITC) is a tax credit for low- and moderate-income taxpayers that is designed to offset the costs associated with earning a lower salary. If you’re working but don’t make a lot of money, you may be eligible.
 
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