What can you do to reduce your taxes at the end of the year?
Max out your 401(k) at work. You maximum contribution is $18,000; $24,000 if you’re 50 or over.
Enroll in college for classes that start on or before March 31, 2017 and pay for the class in this year. Class must be in an accredited school.
Pay your property taxes due in January this year (this may be negated by those in the AMT bracket).
Sell stocks that have lost money – remember that you can only claim losses up to $3,000 in a year – the rest is carried forward to future years. If you have sold stocks that were profitable this year, than you can sell those that have lost to reduce that taxable income.
Charitable Contributions – Give cash or noncash items (see my donations sheet on the forms page – titled Donations 2016 Organizer). You know that you have to clean out your closets – get a chore done, help those less fortunate and reduce taxes. Win, win, and win.
Have a business?
You can purchase a heavy SUV (over 6,000 pounds). The first $25,000 can be expensed (written off). The balance gets 50% bonus depreciation. You still must track the use of the SUV.
If you purchase a Truck over 6,000 pounds, it can fully expensed provided that the cargo bed is at least six feet long and is not accessible from the cab.
Other things to consider:
Roth IRA’s – grow tax free but you put in after tax money.
For those 70 ½ and older – you must take your required minimum distributions from your employer retirement plans and traditional IRAs by December 31. Call them now!
FSA – Don’t leave money in these accounts – by contact lenses, eyeglasses, prescription sunglasses, et cetera – before you lose those funds.