New Year's Day is fast approaching, which means the window for tweaking your tax-related finances is starting to close as well.
Eyewitness News sat down with certified financial planner Brian Gilder to go over some end of the year steps to take to keep your taxes as low as possible. Gilder suggests starting with your 401(k) at work, which you should try to max out.
"First of all it's good to save money," he told Eyewitness News. "Also you're going to pay less in taxes... and especially if your employer is contributing money to you - that's free money, so take it."
If you're 70 and a half years old and have money in tax deferred retirement accounts like an IRA, Gilder says make sure you're taking your required minimum distribution (RMD) for the year. If you don't withdraw the right amount, the government is going to hit you with a 50% tax penalty.
Gilder says self-employed taxpayers can cut back on their tax burden by buying equipment, computers or other items before Dec. 31 so they can write them off for this year. And do not overlook the 199A pass-through deduction.
"Basically, you can get up to a 20% deduction on your business," said Gilder.
If your deductions are close to going over the standard deduction, Gilder suggests you may want to consider piling up as many expenses as you can to push you over that threshold. Prepaying next year's property tax bill or making charitable contributions or medical expenses are ways to do this.
If you have questions about your tax readiness Gilder says call your financial adviser now.
"It has to be done before Dec. 31st," warned Gilder. "Don't wait until April when you file your taxes. It's too late!"
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