12 Days of Tax-Saving Tips
The holiday season is here, and while you’re busy decking the halls and checking off your shopping list, don’t forget to plan for your year-end taxes! To make it simple and stress-free, we’ve put together 12 actionable tax-saving tips to help you save money and start the new year on the right foot. Let’s dive in and unwrap these tips together:
Day 1: Maximize Retirement Contributions
Want to give your future self a gift? Contribute to your retirement account! By adding to a 401(k) or IRA, you’ll reduce your taxable income and set yourself up for a secure financial future. For 2024, you can contribute up to $22,500 for a 401(k) and $6,500 for an IRA—with an extra $1,000 if you’re over 50.
Day 2: Review Your Business Expenses
Take a moment to go through your business expenses. Things like office supplies, software, and utilities might be deductible—and every little bit counts when it comes to lowering your taxable income.
Day 3: Invest in Tax-Advantaged Accounts
Are you self-employed? Consider opening a SEP IRA or Solo 401(k). These accounts allow you to save for retirement while enjoying some great tax benefits. Don’t forget about Health Savings Accounts (HSAs), which can also help you save on taxes while planning for medical expenses.
Day 4: Donate to Charity
The season of giving is here! Donations to qualified charities not only warm your heart but also lower your tax bill. Be sure to keep receipts and acknowledgment letters for your records.
Day 5: Harvest Tax Losses
Did some of your investments underperform this year? Use those losses to offset capital gains. It’s a smart way to lower the taxes you owe on your investment earnings.
Day 6: Defer Income
If you’re a business owner or self-employed, you can lower this year’s taxable income by deferring some income into the next year—especially if you anticipate being in a lower tax bracket in the future.
Day 7: Prepay Deductible Expenses
Here’s a tip: You can prepay certain expenses, like mortgage interest or property taxes, to boost your deductions this year. Just make sure you’re following IRS rules for prepayments.
Day 8: Use the Home Office Deduction
Do you work from home? The home office deduction could be a big help. If part of your home is used exclusively for business, you can deduct related expenses like rent, utilities, and maintenance.
Day 9: Track Mileage and Vehicle Expenses
If you use your vehicle for work, don’t miss out on mileage deductions! Alternatively, you can deduct actual expenses like gas and maintenance. Keep detailed records to stay on the safe side.
Day 10: Take Advantage of Tax Credits
Tax credits are a game-changer because they directly reduce your tax bill. Look into credits like the Child Tax Credit, Earned Income Tax Credit (EITC), or education credits like the American Opportunity Tax Credit—you might be eligible for more than you think!
Day 11: Bonus Depreciation and Section 179
Have you purchased equipment for your business this year? Take advantage of bonus depreciation or Section 179 deductions to write off the cost of qualifying assets. This includes things like machinery or even vehicles.
Day 12: Consult a Tax Professional
The best gift you can give yourself this season is peace of mind. A tax professional can help you uncover deductions, claim credits, and ensure everything is filed correctly—so you can relax and enjoy the holidays.
Wrapping It All Up
Taxes don’t have to be stressful, especially when you plan ahead. By following these 12 tips, you can lower your tax bill and step into the new year feeling confident and prepared.
If you’d like help putting these tips into action, our team at TaxKey Accounting is here for you. Let’s make tax season as smooth as possible together. Wishing you a joyful holiday season and plenty of tax savings! 🎄
Why Choose TaxKey Accounting?
At TaxKey Accounting, we recognize that each business is distinct. Our expert team is dedicated to delivering personalized services designed to meet your specific financial requirements.
