Tax Man's Top 5

As we approach the end of the year, amongst the holiday season talk the occasional talk of the pending tax season will creep up. And the main question will always be are there any good end of the year tax tips.

Well, here is your Tax Man’s Top 5!

1. DONATE, DONATE, DONATE!

Yes, this could be three of the five. You will generally find charitable contributions on any end of the year tax list. Especially this year because again for the 2nd year single/Head of household filers can deduct up to $300 in donations even if you do not itemize. And starting this year Married filing jointly filers can deduct up to $600. If you do itemize this year you can deduct up to 100% of your adjusted gross income in donations.

2. DEFERR INCOME Deferred income equals less taxable income which can result in lowering your tax liability. So, if in the position, make last minute 401k and HSA contributions.

3. HARVEST CAPITAL LOSSES (including crypto losses)

Get rid of any stock losers now. Talk to your broker or review your accounts for this tax strategy. If you own stocks that have lost money, you can sell them and deduct up to $3,000 on your federal taxes. That money can offset gains on other stocks or be applied to regular income taxes.

4. FUTURE EDUCATION Contribute to the kid’s future education via a 529 plan type savings account. May not result in immediate tax savings but can provide it in the future. While there is no federal tax deduction for 529 contributions, money in these plans grows tax-free and can be withdrawn tax-free when used for qualified education expenses.

5. PRE-PAY EXPENSES-Deduct Now and Pay Later

Tax deductions apply to more than the cash or debit purchases you made in the current tax year. You can also take deductions for the tax year in which you charged goods or services with a bank issued credit card even though you may pay for those charges after that tax year. This can be useful to small business owners or self-employed service providers that can claim depreciation on business property purchased on credit. So, business owners or side hustlers double up on any expenses you know you will incur in the first quarter of 2022.

These are quick tips that could minimize tax liability for the upcoming tax filing season. So, amidst this holiday season take a minute and see if you can make any last-minute tax savings