With the holiday season on, taxes might be the last thing on your mind, but saving on taxes means more cash in your pocket. There are only a few days left for this year to end, yet you can save on taxes by making some smart last-minute tax moves. These are:
- Purchasing supplies - If you need to buy office supplies early next year, buy them in advance before Dec 31 this year and take advantage of section 179 deduction. This deduction is for computers and large office purchases of up to $500,000. This tax break was extended by the Congress for 2014. It may or may not be available in 2015.
- Determine your income and expenditures - If you know your exact total income for this year and your expenditures, you can make adjustments to gain tax benefits. For example, postponing bonus and increasing expenditures can help you lower your tax bill. Consult your tax advisor to know which tax moves will give you the most benefits.
- Contribute to a retirement plan - You can contribute to a retirement plan to save for your future and also to lower your tax liability. For 401K, the maximum contribution you can make is $17,500.
- Contribute to Employee Pension Plan - If you are self-employed, you can set up an employee pension plan. You can contribute the lesser amount of up to 20 percent of your income or $52,000 before the tax-filing deadline of 2015.
- Give Gifts - The annual gift tax exclusion for 2014 and 2015 is $14,000. To avoid paying gift tax, you can give gifts of up to $14,000 to any number of people before the end of this year. You will not need to file gift-tax return or pay taxes on it. If you are married filing jointly, you and your spouse can give gifts of up to $28,000.
Labels: IRS, Tax Code, Tax Credit, Tax Deductions, Tax Filing, Tax News, Taxpayers