That ticking you hear is the tax clock winding down – quickly. There is only a very short time left to cut your taxes for 2015. Here are last minute tax saving strategies you can still make before year-end.
Tax Saving Strategies
- If you believe you will owe state or local taxes, consider prepaying them before the end of the year in order to claim the deduction in 2015. (Be aware of alternative minimum tax consequences.)
- Use your credit card to purchase (and deduct) items in 2015. Using a credit card lets you take a deduction when the purchase is made, not when the card balance is paid. You can use the credit card rule for both business and personal transactions.
- If you’re a business owner and need additional furniture, fixtures, equipment, and computers to operate your business, consider making the purchases before the end of the year in order to qualify for the Section 179 expensing deduction.
- Don’t ignore stock losses, since they can be used to offset stock gains. If you have unrealized losses for 2015, consider selling those positions to offset any gain transactions you might have made. You can also deduct up to $3,000 in net capital losses against other income. Net losses greater than $3,000 can be carried forward and used on your 2016 tax return.
- Consider making a deductible traditional IRA contribution. If you qualify, you can contribute up to $5,500 for 2015, plus an additional $1,000 “catch up” contribution if you are age 50 or older. You have until mid-April 2016 to make your contribution and still take a deduction for 2015.
- Maximize your employer tax-deferred retirement accounts, such as 401(k), 403(b), or 457 plans.
- Donate appreciated stock or mutual funds to charity. You receive a deduction for the appreciated value, but you don’t have to report or pay taxes on any of the appreciation.
Give us a call for more tax-saving tips that you can fit in before December 31.