It’s really the middle of November already. Thanksgiving is just a few days away and Christmas is soon to follow. People are grateful for many things at this time of year, but one of them isn’t taxes. Of course, the real tax season doesn’t begin until January, but November is certainly a good time to start preparing for them if you haven’t already. There are several key things to be aware of right now if you want to help keep your taxes on the low-end come 2016. So let’s take a look at what you can do to keep a little more money in your account next spring instead of giving it to the IRS.
Start By Getting Organized
Organization is one of the first steps to being ready for taxes. Start by gathering all your important tax documents, receipts and account information that you’re going need come January. Find what system works best for you and then get all that paperwork and information in order. Having everything organized and filed in a systematic way will make tax season much easier. To go along with that, start making some lists of all your income, your expenses and everything else that will affect your taxes. By having everything in order this helps reduce the chance of making costly mistakes on your return.
Add to Your Flexible Spending Account
If you pay several different medical expenses every year then a flexible spending account (FSA) could be a valuable option for you. If you’re married, then both you and your spouse, can put as much as $2,500 each into this account, before taxes. That could save you about $1,000 each if you’re in the 25 percent tax bracket. That saves you on income taxes, as well as on the Social Security and Medicare taxes that come out of your paycheck. However, be sure you know the rules of your employer FSA plan before allocating funds to this type of account.
Are You Self-Employed?
One nice benefit of being self-employed is being able to file a SEP IRA or solo-401k. If you open it before December 31 and start contributing in 2016 it can actually help lower your taxes from 2015.
Do Some Pre-Calculation
Another smart move to help cut your tax bill is to do a little pre-calculating before the year ends. If it looks like you’re going to owe some money to the IRS, you can actually change your withholding status with your employer for December to have more held out. While it will reduce your take home pay, it could also reduce your total bill when you file, which could help you eliminate any possible penalties and interest.
Let GROCO Handle it for You
These are just a few of the steps that you can take right now to help reduce your tax bill. And now that you know about these steps you can sit back and have even more to be grateful about come Thanksgiving. Tax season is a necessary evil but it doesn’t have to be a horrible experience every year. If you don’t want to worry about your next tax season, then just contact GROCO. We will do the worrying for you. We can help you start planning now and then file your taxes for you next year. We work to save you as much money as possible and keep your tax bill as low as it can be. Please contact us to find out how we can help you. Then you can relax and enjoy the holidays knowing that your taxes are in good hands. Call 1-877-CPA-2006 or contact us online.
The post Try These Smart Tax Saving Moves Before the Year Ends first appeared on Advisors to the Ultra-Affluent – Groco.