Money Saving Tips for Tax Time

Money Saving Tips for Tax Time

 Money Saving Tips for Tax Time

The new year is here and you need to think about filing your taxes and work out ways to reduce your obligations. Simply said, it’s time to start planning. Here are a few tips that promote smart choices.

Be aware of possible tax provision extensions

Congress can still extend some popular tax provisions before the end of the year. Look for updates on provisions such as taxpayers 70.5 years and older to make tax-free charitable donations or business deductions for serviceable equipment, and more.

Track the time you spend on business activities

Keep track of time spent on business activities. Business owners may be relieved of the 3.8 percent Medicare tax on business income if they participate enough in the business to prevent being classified as a passive investor.

Stay current with information reporting

Make sure you comply with required documentation and be on time to prevent potentially large fines at tax time.

Keep on top of your state and local responsibilities

Keep in mind that State and local government agencies enforce their own tax filing and payment obligations for income, sales, and property. Be sure to avoid additional charges.

Increase deductions to defer income

As far as taxes go, you want to accelerate deductions and defer income. Think about deferring bonuses, self-employment or contract earnings. Consider increasing regular income and real estate tax payments throughout the year.

Do you anticipate a tax deficit?

Examine your withholdings for the upcoming year. Estimate what your tax payments will be. If you think you may face an underpayment fine, you can prevent that penalty by increasing withholding from your salary.

We can help you make a detailed assessment of your current tax situation and help you develop a strategy on reducing your taxes for 2016. Call us today at 608-233-9769.