December is coming to an end but before ringing in the New Year it’s important to wrap up your finances and prepare for tax season. Lisa Greene-Lewis, CPA and TurboTax expert revealed to Latin Times five end-of-year tax tips to help us get a head start and maximize our tax refund.
- Get organized . Sooner rather than later. It’s never too early to gather receipts for tax deductible expenses and sources of income. Doing it now will help you ensure you’re not forgetting anything significant and help you see a better snapshot of your finances ahead of the new year.
- Clean your closets and save. If the holiday spirit beckons you to give back, donate clothes and household goods to those in need and reap the benefits of a tax deduction for non-cash and monetary donations donated to a qualified charitable organization. Make these donations count on your taxes by donating by December 31st. Even if you make a donation by credit card, you do not have to pay that credit card bill in 2016 in order to receive the tax deduction.
- Don’t forget about Dependents. If you had a baby this year, don’t forget that you may be able to get a valuable tax deduction of $4,050 for your baby. Just make sure you get a social security number or ITIN for your new baby.
- Maximize your retirement. Prepare for the future while receiving some of the benefits now. Making contributions to your retirement savings account, be it 401(k) or Traditional IRA, can increase your nest egg and reduce your taxable income. Additionally, self-employed who contribute to SEP IRAs can deduct up to 25 percent of compensation or $53,000 for 2016 and deduct it as a business expense.
- Take a class. Taking a course comes with two benefits: Professional development and boosting your tax refund. Paying for next quarter’s tuition by December 31 may give you a valuable tax credit up to $2,000 with the Lifetime Learning Credit of TurboTax