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Year-End Tax Planning: Smart Moves to Make Before the Ball Drops

Year-End Tax Planning: Smart Moves to Make Before the Ball Drops

November 09, 2023

It's that magical time of the year when twinkling lights, festive decorations, and the sweet aroma of pumpkin spice fill the air. While this season is packed with joy and celebrations, it also signals the winding down of the year, making it the perfect time for some year-end financial reflection.

In the spirit of gift-giving, we've wrapped up some valuable tax planning tips to help you navigate this season with financial finesse. So grab your favorite winter drink, snuggle up, and let’s dive in!

  1. Gift Wisely:

Considering a charitable donation? The holiday season is a wonderful time to give, and it also comes with tax benefits. Remember, cash donations, as well as donations of property or stock, may be deductible. Keep your receipts and understand the limits based on your income.

  1. Optimize Your Home: 

If you've recently taken out a mortgage or refinanced, you might have deductible mortgage interest. Making an extra mortgage payment before the year ends can bump up your deductions.

  1. Boost Your Retirement: 

Adding more to your 401(k) or IRA not only sets you up for a cozy retirement but also reduces your taxable income now. Check if you’ve maxed out your contributions for the year.

  1. Harvest Your Losses:  

If you have investments that didn’t quite pan out, consider selling them to offset any capital gains you might have. This is called tax-loss harvesting, and it's a silver lining to those not-so-great investment choices.

  1. Check Your Mailbox:  

Ensure that your address is updated with banks, investment institutions, and employers. You don't want to miss out on any tax-related documents that come in early next year.

  1. Flex Your Flex Account:

If you have a Flexible Spending Account (FSA), it's "use it or lose it." Check the balance and consider using it on eligible health expenses before year-end.

  1. Plan Ahead:

Expecting a bonus? Speak with your employer about potentially deferring it to January if you anticipate being in a lower tax bracket next year

  1. Review and Adjust:  

Life happens. Marriage, birth, new job, or retirement - these life changes can affect your tax situation. Make sure you review and adjust your withholding to avoid any unpleasant surprises.

Alright, savvy savers, that's a wrap (pun intended) on our year-end tax tips. We hope these tidbits light up your financial path brighter than a holiday display.

Remember, tax planning isn’t just about saving money. It’s about smart financial decisions that set you up for a prosperous future. And while we love sharing these general tips, individual financial circumstances can be as unique as snowflakes.

Looking for a personalized approach to your year-end tax planning? Reach out to us! Our team at Martin Haugh Financial is here to guide you with tailored solutions for your financial landscape. Let's toast to smart financial decisions and a sparkling new year ahead.

Until next time, keep those financial spirits bright!