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Tis the Season of Saving: 5 things you can do now to help reduce your taxes

Posted by Matt Szydlowski, CPA on Nov 21, 2017 9:55:47 AM
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In the quest for gifts and seasonal savings together with the promise of continued prosperity, many taxpayers overlook some of the simple year-end moves they can do that will help to reduce their taxes and improve the bottom line.   There are many action steps you can perform today in order to save taxes for the next tax period.  Below, find a shining display of our top five tips to save future tax dollars. Cleveland CPAs help you save on your tax return.jpeg

Capital Losses - Utilize capital losses that would otherwise be carried over to next year by selling any capital investments that have large gains.  Only $3,000 of capital losses can be used each year if there are no gains with excess losses carrying over indefinitely.  However, you can use any amount of capital losses as long as there are capital gains to offset against those losses.

Pre-tax Retirement Contribution – Contribute additional money (if you haven’t maxed out) to a traditional 401(k).  The total 401(k) contribution limit for 2017 is $18,000.  By contributing pre-tax dollars to a traditional 401(k) you reduce your taxable income and the earnings are tax deferred.  If you are over 50, you can also make an additional catch-up contribution.

Charitable Contributions – Donating cash to a qualified 501(c)(3) organization allows for an increase in itemized deductions which lower your taxable income.  Please note, this is not applicable if you utilize the standard deduction and do not itemize.  You may also have opportunities to donate appreciated securities or other property.

Buy a House – It is a bit of a stretch to accomplish this quickly, but buying a home comes with many tax benefits.  Under current tax law, you are able to deduct the mortgage interest and real estate taxes you pay as itemized deductions.  Law changes currently under debate may change these deductions in the future.

Hire a Certified Public Accountant (CPA) – Significant life events in the prior year such as buying or selling a home, getting married or divorced, adopting or having children, or changing jobs, warrants having a CPA look over your prior year tax return to uncover potential tax savings that may have been missed. As a result, your CPA can work with you to prepare an amended return so you can claim those benefits and receive a refund.

If you are ready to implement year-end tax moves, contact me at mszydlowski@zinnerco.com or any of our professionals at 216.831.0733. I'm happy to help and ready to start the conversation. 

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Topics: Taxes - Corporate & Business, Taxes - Individual, income tax, Matt Szydlowski

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