Tax season is merely one financial quarter away. If you haven’t started your tax planning yet, you aren’t alone. Most people wait until the start of the new year to shift their focus to how much they’ll owe Uncle Sam. Sensible Services ABC in Hammond, La, is here to help you coast through tax season without a single worry. Here’s a quick look at some of our end-of-year tax planning tips that will help you make a seamless segue to tax time.
Spending Money now Might be in Your Financial Interest
Spend money before the year comes to a close by paying expenses in the final month or adding new supplies to your office, and you’ll be able to write them off on the current year’s taxes. It also makes sense to pay all outstanding invoices before the last day of the year. The more invoices you pay and the more supplies you buy before the year ends, the less your tax burden will be.
Own a Business? Consider Deferring Income
Deferring income to the ensuing year means you’ll pay fewer taxes for the year coming to a close. Meet with our tax team in Hammond, La, to determine if it is prudent to defer income to the year ahead, and you just might save hundreds or thousands of dollars in taxes. For example, delaying the creation and transmission of invoices for customers until the start of the new year allows for income to be recognized in ’22 instead of ’21, ultimately reducing your tax burden for the current year. However, it must be acknowledged that some customers might request to pay in the current year to claim the expense before ’21 comes to a close.
It Might Make Sense to Fund Retirement Plans
If you own a business, contributing to an employer retirement plan will decrease your income. If you have such a plan and can make contributions, make them before the deadline. Sensible Services ABC is here to help you determine the timing of the contributions based on the type of plan so you can time it just right and minimize your tax burden.
If you are concerned about owing money this upcoming April, consider altering the amount of earnings your employer holds from your final month or two of paychecks. Consult with our tax planning specialists in Hammond, La, update your W-4 form, and you’ll save that much more when tax season rolls around.
Contribute to Your 401(k) Plan
Your final paychecks of the year might be best spent in the form of additions to your pre-tax 401(k) plan or 403(b) deferrals to reduce your adjusted gross income. The limit for employee contributions to 401(k) plans for the year coming to an end is $19,500. Sensible Services ABC has all the other pertinent information you need, including the details of the elevated contribution cap for those age 50+.
Take Advantage of Tax Loss Harvesting
If you sell investments in accounts that are not tax-advantaged retirement accounts or tax-deferred retirement accounts before the year’s end, you’ll owe capital gains taxes. You can offset this financial burden by selling investments in taxable accounts at a loss. Our Hammond La tax specialists are here to help you perform such tax-loss harvesting to maximize your financial nest egg as you transition to the new year.
Sensible Services ABC is at Your Service
Instead of planning for tax season on your own, lean on the proven experts for guidance. Sensible Services ABC in Hammond, La, is here to help you prepare for tax season and keep as much of your hard-earned money in your pockets as possible. We provide tax preparation, tax resolution, accounting, and payroll services. Give us a call today at (985) 222-2088 to get the ball rolling on your tax planning. You can also reach our Hammond, La tax professionals on the web by completing our contact form.