It’s beginning to look a lot like tax season. And while many of us would rather not think about financial matters – regardless of the season – there are some smart moves to consider making before the year ends.
David Henderson, a CPA at the firm of Duggan Bertsch in Chicago, offers some advice.
• Consider “bunching” your itemized deductions
“Bunching is basically grouping, but grouping otherwise deductible expenses that you would spend over, say, two or more tax periods into a single period,” said Henderson. Charitable contributions, property taxes and medical expenses are examples of deductions that can be bunched.
This is a good move if you can do it. The IRS has limits on contributions to 401(k) plans and IRAs that can be tax deductible. If you can add more, consider it, though “maxing out” isn’t good for everyone.
Contributions to a 529 Education Savings Plan are deductible up to $10,000 if you are single, and $20,000 if you are married and filing jointly.
Get the tax benefit of a stock market loss.
• Budget
Make a budget and review your financial goals.
And, just to complicate matters – or maybe let you off the hook! – here is one financial columnist’s alternate advice.
Related stories:
New Year, New Taxes: What Will Cost More in 2020
Chicago Parking Fees Increasing, But City Set to Save Millions
It’s Tax-Filing Season. What You Need to Know About This Year’s Forms