Knowing how to save tax dollars for 2016 may not be on your mind right now, but soon it is going to become very important. The team at North Georgia Accounting Services is looking out for you and has come up with 5 quick tips to get you started.
When it come to tax preparation or tax planning in the Buford, Sugar Hill or Suwanee area we are ready to help. NGAS is looking to help with your individual tax situations or your business tax situation. Many of our customers are small business owners and being sure that your tax situation is not just a tangled and jumbled up mess is something that we help our clients with everyday.
As the end of the year approaches, you are probably busy planning for the upcoming holidays. We spend hours and hours planning our menus, shopping for our loved ones, decorating our homes and visiting family and friends. In all the holiday hustle and bustle, we want to remind you to take a few minutes to review your income and taxes prior to the end of the year.
Good planning and prep prior to the close of 2016 could potentially save you hundreds and sometimes thousands in tax dollars. So, we encourage you to plan a fun-filled evening with your income records and deduction receipts. Get an idea of how much money you have made, your withholdings, your deductions, tax credits, etc.…. Are you financially the same as last year? Have you had a financial change in your life (loss of job, raise, change to the type of income received)?
Here are 5 quick tips to save tax dollars for 2016:
- The first tip to saving you tax dollars is if you itemize, make additional charitable contributions of cash or property. For non-cash donations, you need to get a receipt from the qualified organization showing the name of organization, date and location of contribution, and a reasonably detailed description of the property and value. Go to www.goodwill.com for a list of items and suggested FMV. For cash donations, you need to obtain a receipt or letter from the qualified organization and we recommend keeping a copy of your financial document as well (cancelled check, charge receipt, etc.….)
- If you itemize, make the January payments for your mortgage, mortgage insurance, and 2017 property taxes in December. If you pay these by escrow, have the mortgage holder to take them out in December. If made in December, they will be reported as paid on your 1098.
- Consider contributing to your “cafeteria plan” or Health Savings Account (HSA) before the end of 2016. Contributions for 2016 for individuals are limited to $3,350 ($6,650 for employees with a family) to pay medical or dependent care expenses. For taxpayers 55 or older, an additional $1,000 may be contributed. Over-the-counter medications, unless prescribed by a doctor, cannot be paid with HSA contributions. Your contributions reduce your W-2 and self-employment income and federal income and social security or self-employment tax. Be sure to use all your contributions before December 31 because any remaining amount in your account at the end of 2016 will be forfeited to your employer. However, some employers will allow you to carryover $500, so you need to review your plan. If you don’t expect to use the full amount in your HSA, check with your employer to see if they will approve a carryover.
- Another way to save tax dollars is to increase contributions to your tax deferred 401(k), 403(b), 457 government plan, or SEP plans before the end of the year. Contributions reduce salaries or self-employment income which reduces the income and self-employment tax (for a SEP contribution).
- Lastly a tip to save tax dollars is to pay 2017 college tuition and fees for yourself, your spouse, and dependents in 2016. Unless you or your spouse’s education expenses are business related (these are a miscellaneous itemized deduction), they are deductible FOR AGI. In lieu of a deduction you may be eligible for a credit which may reduce your taxes more than a deduction.
Please contact North Georgia Accounting Solutions for any and all tax planning and tax preparation. We would love to help you save tax dollars this tax season. NGAS has specific services to prepare your tax returns and get tax planning in shape. For more tips on how to save you tax dollars just follow us here to see new posts.