By Ryan Velez
The new year is almost here, and in lieu of recent political news, you may be thinking more about what your taxes will look like next year rather than your New Year’s Eve party. While it may be too late to change what has happened, you can lower your stress by making preparations now. Black Enterprise has some tips to make sure that you’re not one of the 20% of people who wait until a week before the deadline to file taxes.
“If you wait until the last minute to file, you can miss potential tax-saving opportunities due to time constraints and lack of organization,” says Steve Pelmore, tax services manager at Hoskins & Company, a Black-owned CPA firm in Nashville, Tennessee. Not to mention, doing this early means fewer headaches for you. Here’s some more insight from Pelmore:
Organize records and contact a tax professional: Set the stage properly before getting started “All taxpayers should be organizing their records and reaching out to a tax professional for specific guidance based on their situation,” Pelmore says.
Review donations to non-profit groups: This may be impacted in the future by the new tax bills, but for now, things are still good. “Review cash and non-cash donations to not-for-profit organizations. Making an end-of-year donation may lower your tax liability if you are able to itemize.”
Examine money contributed to retirement accounts: Hopefully, you’re doing this for your own sake, but this may help with your taxes as well. “Review the amount of money contributed to your retirement accounts. If you have not reached the maximum contribution amount, consider making an end-of-year contribution to potentially lower your tax liability.”
Look for ways to reduce your tax burden: This is especially important for business owners. “If you a business owner generating a profit and you are considering equipment purchases or upgrades, you may want to consider making those investments before Dec. 31, 2017, to potentially receive tax benefits for this year.”
See what tax breaks a year-end bonus may bring: When your employer takes care of you, take care of yourself. “If you are expecting an end-of-the-year bonus from your employer, consider putting it into your employer-sponsored retirement account or other deferments such as an employment stock purchase program if offered by the employer. These alternatives will potentially allow you to grow the funds and defer the tax implications to future years.”