With all the joy and good cheer of the approaching holiday season, it might be a bit of a downer to have to shift gears and think about nasty stuff like taxes, but there really are a few moves you should consider before year’s end.
Bump up your retirement savings
Even if retirement seems like some far-off dream world to you, the sooner you start saving for it, the better. Now is a good time to take stock of your saving plan, and if you want more than a stick house residence in your future, you should begin increasing your savings efforts now. Keep in mind each year there are limits on income contribution amounts that you can make towards retirement savings accounts. However, tax deferred retirement accounts allow you to lower your taxable income rate for the current year based on your contributions.
It makes everyone feel good to do, but, even more so when working with Uncle Sam at tax time. Donating gently used items around your home like furniture, clothing, shoes, and other household items can lower your tax bill, saving you money! Be sure to get a receipt when donating to licensed organizations like the Salvation Army or Goodwill.
Consider a Roth conversion
If the past year was one of low income for you, or if your business experienced significant losses, it might be advantageous to move funds to a Roth IRA, because while those funds would qualify as income for the present year, they would be offset by the operating losses you had. For more budgeting tricks and ideas check out this article.
Re-evaluate your stock options
If your employer makes stock options available to you, you should consider projections for these stocks, particularly in cases where such stocks will be maturing in the near future, or when they are close to vesting time. With the rest of your portfolio, assess what’s working well and what isn’t, and review all this with your financial advisor.
With President-Elect Trump getting ready to come into office there be prepared for changes to your financial situation, check out this post outlining a few possible scenarios.
Additional Resources: Forbes Tax Article