Which strategies are you utilizing to maximize your tax savings this year? If you haven’t covered your strategies yet, there is still time. However, you’ll need to make some decisions before December 31. At Pacific Tax & Financial Group we assist individual taxpayers and businesses to formulate tax plans that reduce taxes.
Our next few blogs will cover end-of-year tax tips that you may find quite profitable. In this blog we’ll discuss three strategies.
Employee Flexible Spending Accounts
Working for an employer that provides a health plan can be quite beneficial tax-wise. If your job has health insurance, you should take advantage of a flexible spending account (FSA). Any funds put within a FSA can be used towards different types of medical expenses such as:
- Doctor copays
- Medical equipment
- Prescription medication
If you have any money left in your FSA at the end of the year, you can use that on medical expenses you will need for the next year.
Estimate Income & Determine Tax Benefit Phaseout
Sometimes tax benefits are phased out when income increases. Upon reaching certain levels of income, tax benefits are significantly reduced or wholly eliminated. If you find yourself near to the phaseout range, it may be a good strategy to lower your AGI. Contributing to retirement plans such as a deductible IRA, 401 (k), and 403 (b) are effective ways to reduce AGI.
Make Charitable Donations to Lower Income
Another strategy to reduce your taxable income is to make charitable donations. Any donations made before the close of the year, December 31st to be exact, can qualify. If you do so, make sure to maintain a record of the documentation.
Every year clients and prospects ask us questions about personal and business taxes. Would you like the insight of a tax team with more than 100 years of experience? If so, give us a call at the number below!