Tax planning is not one of the most interesting things in life; however, it is necessary because it saves you money. You only fill your tax returns once per year but trimming your tax bill is a thing you can start doing right away. I am sure you have managed to claim several allowances for yourself in the last year. But, hey, it’s not too late to craft a plan for your little game of your annual “New Year Resolution.” In fact, I am here to give you some tips that will help trim your taxes and save your money.
Here is the deal;
Be smart; for sure it’s a crime to evade taxes but its okay to avoid paying more than necessary. You don’t have to pay Uncle Sam more than he is supposed to get from your pocket.
Besides, it’s your hard-earned CASH, and as such you have every right to keep it.
Tip 1: Pay Your Taxes As Early As Possible
I’m assuming that you have already made your final state estimated tax payments for the year 2017. Needless to say, it’s important to pay state taxes early while they are still deductible. However, be watchful of the alternative minimum tax as it adds to your prepayments which in turn will reduce the tax savings.
According to Internal Revenue Service, you can deduct your 2018 state and local property taxes on your 2017 returns. However, that’s if you paid your tax bills before the end the year. Note: that will happen only if those taxes were assessed before the New Year.
Tip 2: Prepay Your Property Taxes Early
Most of the homeowners in states with high property taxes have been asking questions regarding the forward as to when and how to pay their levies so that they can take advantage of the tax break which is going to be limited in 2018. In that regard, if you are a homeowner, you can check with your local authorities to see if real property taxes have been assessed.
That’s not all!
The new tax law has limited the deduction that taxpayers can take from the state as well as local taxes that they pay. As a matter of fact, the deduction is capped at $10,000. Thus, if your property tax bill bigger than that, it’s paramount that you pay it as early as possible to avoid losing deductions. But that is not all; you need to check out for the ATM as it adds up to your savings.
Tip 3: Pay Your January Mortgage Early
One of the things that can render your mortgage interest deductions irreverent is the amount of increased standard deduction. As such, it’s wise to prepay your mortgage early so as to increase your deductibles for 2018.
Tip 4: Increase Your Donations To Charities
With increased standard deduction amount you might not have enough donations left to file the Schedule A form. As such, it is advisable to increase your donations in 2018 as it still possible to claim your deductions.
Tip 5: Consider Buying A Home
Maybe you didn’t know, but the amount of interest paid on mortgage is tax deductable, and so is the case with any other points that you may have purchased reduce the interest rate. As such, if you buy a home once, you save yourself a lot of trouble as far paying for mortgage tax is concerned.
Tip 6: Even One-Time Deductions Matter
Most of the taxpayers focus on annual deductions only; that is, state income, real estate, and property taxes. But there is more!
Less common deductions may save you a lot of money. Have you ever considered things like theft, disaster or casualty deductions? If no, here is the Kicker!
If you experience theft, fire, any other loss, it is incumbent upon you to claim your casualty, theft deduction.
But first, you will need to evaluate your loss and provide accurate figures regarding that event – loss, theft or fire. Then you will have to subtract insurance reimbursement or any salvage value. For your net loss, subtract $100, and there you have it. The law allows you to deduct net losses that are more than 10% of your gross income. So you see, don’t ignore such deductions, they are important.
In a nutshell, it is paramount that you plan your taxes properly to avoid overpaying Uncle Sam. You don’t have any reason to pay more. If you find you have any problem with your taxes, feel free to contact Tax Relief Companies such Tax Mediation Services.
You work hard for your money not to enjoy it. These six tips will help you save money this year.
Happy Savings and Good Luck!