For the largest income declaration of 2022, do these 5 things by December 31
These end -of -year tax advice can benefit from you significantly when depositing.
Let's be honest, most of us do not start Think of our taxes Until much closer to the April deposit deadline. But getting ahead of your taxes could be useful in the long term, not to mention a more fluid sail during the next tax season. The Internal Revenue Service (IRS) has already warned taxpayers that "reimbursements Can be smaller In 2023 "due to a certain number of changes this year, including the absence of a recovery check in 2022 and reduces credit amounts. A smaller reimbursement. According to tax experts, there are five things Different that you can do by December 31 to increase your 2022 income declaration. Read more for these end -of -year tax councils.
Read this then: The reason n ° 1 that you could be audited by the IRS, warn the experts .
1 Make your home more energy efficient.
Go green this year to become greener when depositing your taxes in 2023.
According Jessica Chase , a loans and finance expert At the first title Pabes, you have a better chance of obtaining a larger income declaration of 2022 if you "make your home more energy efficient" before the end of 2022. The IRS currently allows taxpayers to claim the Residential energy efficiency mortgage By installing alternative energy equipment in their space.
"Before January 1, 2023, owners who install solar panels, wind turbines or geothermal heat pumps are eligible for a 26%tax credit," explains Michael Hess , a financial expert and the electronic commerce strategy at the top of the code signature store.
But for all the installations made after this date, the available credit decreases to 22%. By making this change before the end of the year, you can maximize your return amount.
2 Put more money in your retirement savings.
If you don't have time to invest in your home right now, invest in your retirement instead.
"The most important thing of American taxpayers can do before December 31 to help increase their chances of obtaining a larger income declaration in 2022 is to maximize their contributions to retirement plans", " Tommy Gallagher , a Former investment banker And the founder of the best mobile banks, says Better life .
Gallagher advises people to contribute the maximum amount they are authorized to their 401 (K). "This will help reduce taxable income and lead to a higher reimbursement in 2022," he said.
But you have to do it before the end of the year to make the difference: "Most 401K plans require that employees finish their contributions to retirement before December 31, "explains Robert Farrington , a financial expert and founder of the college investor. "In 2022, you can contribute up to $ 20,500 (plus an additional $ 6,500 in catch -up contributions for those over 50)."
3 Defuse the end -of -year bonuses.
Holiday bonuses are common in many industries and are generally welcomed with open arms by employees. But Moira Corcoran , a certified Public accountant and tax expert With Justanswer, warns that this additional payment at the end of the year must make potential to push certain people in a "higher tax tranche", which will lead them more in taxes.
To avoid this, Corcoran advises certain taxpayers to consider postponing their vacation bonuses until after December 31st.
"Ask your employer if he can pay your bonus in January instead," she said. "This pushes all tax liability on the bonus in the next tax year. This is useful for maintaining your lower tax obligation during the current year if the bonus pushes you in a higher tax tranche."
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4 Give a work of charity.
You can also benefit from the tax time by helping the others before the end of the year. AE0FCC31AE342FD3A1346EBB1F342FCB
Michael Collins , CFA, a financial teacher At the Endicott College de Beverly, Massachusetts, advises taxpayers to "make charitable donations" by December 31 to improve their chances of having a larger return next year. "Donations to recognized charitable organizations are tax deductible and can help reduce the amount of taxes paid in the following year," he said.
According to Collins, you must start by searching for charity eligible for tax deductions, then determine the amount you want to give. And you should also keep a detailed donation file.
"For cash, check or other monetary gift contributions (regardless of the amount), you must maintain a Contribution registration : A banking file or a written communication from the qualified organization containing the name of the organization, the amount and the date of the contribution, "explains the IRS on its website.
5 Use the tax loss harvest.
According to Gallagher, taxpayers should also take note of their capital gain and their losses for the year before December 31.
"If people have experienced significant capital gains throughout the year, they should consider collecting any loss to help reduce the taxable amount," he said. "This means selling investments that have suffered a loss to compensate for the profits they have made."
The use of this tax harvesting method can help you reduce your taxable income amount and increase your chances of "obtaining a larger income declaration" next year, explains Gallagher.
But you don't have to go alone: "like many tax concepts, the tax loss harvest is simple to understand but can be complex to execute well," warns, warns Tom Wheelwright , a accountant (CPA) and CEO of wealth capacity. "You will want to work with your CPA or your tax advisor to make sure that you do not submit to any of the rules, especially if you want to reinvest in the same titles that you have sold at a loss."
Best Life offers the most up -to -date financial information for the best experts and the latest news and research, but our content is not supposed to replace professional advice. Regarding the money you spend, save or invest, always consult your financial advisor directly.
