It’s easy to get lost in the holiday spirit and forget about the implications certain areas can have on our tax savings. (With the year we’ve just had, many of us are simply glad that 2020 is nearly over.)
Nevertheless, now is the time to make sure you’ve done all you can to maximize (or minimize) a few things for your savings and your tax bill.
First things first…
Charitable Giving
Charitable giving. This is the time of year when charities “seem” more visible. But most donations must be dated before December 31st to count on your 2020 taxes.
Now is also a good time to spend a few minutes tracking down ALL of your receipts for donations and such before the end of the year. Can’t find a specific receipt? Contact the charity in question to ask them to send you a copy of your receipt. Do it now, though, because it’s often harder for charitable organizations and non-profits to find this material at the local level. Especially when they are staffed with volunteers.
Retirement Contributions
Retirement contributions. I talk about this all the time. And, while you have until April 15th in some cases, MOST retirement funds require annual contributions before December 31st. Have you done it? If you’re waiting on an annual bonus, it might be worth it to go ahead and make the contribution now. To be assured it’s logged before year’s end. You can always go pay yourself back.
Sometimes you have to spend money to save money…
College Funds & Healthcare Accounts
Another contribution that many overlook is college funds and various healthcare accounts.
Some, like HSAs (Health Savings Accounts) have stricter rules and guidelines than others. So BEFORE the end of the year, it’s smart to review and see what you either need to use, save or how much might rollover.
Tax Savings: 2020 Financial Impacts
This year, more than many in recent memory, has seen a lot of financial impacts on families. And if you’re one of them, it’s a smart strategy to do some calculating to see where your potential tax liability is. Then reverse-engineer some solutions. We’ve fielded a lot of calls from customers who have seen a dramatic change in incomes, and they may subsequently be in a different tax bracket this year.
Perhaps you qualify for tax breaks you couldn’t claim in previous years. Perhaps you took money from a retirement account. Or, maybe you changed jobs.
All these can have a dramatic effect on your taxes. So if that sounds like you, it’s not a bad thing for us to jump on a call to make sure you have your financial act together and prevent any “surprises” in 2021.
My team and I are more than happy to answer your questions and even make some recommendations. Give us a call or send us a message through our contact form below and let’s get you on the right track!
