As the end of 2017 looms, folks are thinking about holiday cheer, New Year’s Eve plans, and…taxes. Oh, you’re not thinking about taxes so much yet? You may want to consider some of these last-minute ideas that could help save you a few bucks on your 2017 tax bill. The experts at Sturgill Financial Group and H&R Block have offered the following tax tips:
Sell Off Securities
If you have a large net capital gain so far this year, consider selling some stock to generate a loss before Dec. 31. Doing so could reduce the amount of tax you pay. Whatever you do though, experts say don’t let possible tax savings cause you to make decisions contrary to your investment interests.
Think about giving back at the end of the year. The holidays are an excellent time to be kind to others — so consider donating goods to qualifying charities or making a cash donation. If you are donating used goods, value them as if you were selling them at a yard sale, and be sure to get a receipt. For cash donations, write a check or use a credit card for record keeping — and remember that for donations over $250 you will also need an acknowledgement from the organization. If your volunteer efforts for a charitable organization require driving, track your mileage; you can deduct that driving at 14 cents a mile.
Track Medical Costs
Keep scrupulous records of your unreimbursed medical expenses all year long — including mileage to appointments, co-pays and prescription costs. You can deduct them if, combined, they’re more than 10 percent of your adjusted gross income if you’re under 65 (7.5 percent if you’re over 65). You might consider having an elective or necessary procedure before year-end — but be sure the procedure is among the qualifying deductible expenses. Many elective procedures don’t qualify for this deduction.
If you’ve had a particularly good year at work, you may find yourself getting a bonus. If possible, see if your boss will pay that bonus in January, since, depending on the amount, it could bump you to another tax bracket. This could be of particular significance if Congress reduces the tax rate in 2018.
Consider accelerating tax deductions that are recognized the year in which you pay them. For example, if you own a home and get a mortgage interest deduction, and if you make an extra mortgage payment on Dec. 31, you can claim that additional tax deduction on this year’s taxes.
These tips are provided by experts, but be sure to check with your tax adviser to establish which decisions work best for your portfolio.