With 2017 winding down to a close, it’s time to consider what we can do now to prepare ourselves to make the most of our tax return. You may not realize, but there are also a few matters to consider for your 2018 return in light of the tax changes passed this December.
One of the easiest and most generous ways to add to your final return are charitable contributions. There have been so many catastrophes throughout 2017 that it is, sadly, very easy to choose one or two that you feel would benefit from your contribution. You will need to make these donations in cash or physical property.
If you are able, try to make any loan payments for the month of January before the end of December. This allows you to deduct the interest for this year rather than the next. The types of loans that are eligible for this benefit include mortgage interest for both first and second (home equity) mortgages, mortgage interest for investment properties, student loan interest, and the interest on some business loans, including business credit cards.
Salary Raises and Bonuses
Getting a bonus or pay increase this month? Ask your employer if you can defer it to January. With the new tax bill, the return on taxable income will be higher in 2018 vs. 2017. Make the most of that extra income by waiting just a few more days.
Increase Your 401K Contributions
With the impending higher tax rate on its way, plan to save for your retirement by increasing your 401K Contribution. Less income will be taken from your weekly or bi-weekly pay check so why not use that extra cushion to bump up your retirement savings plan. Saving now will only be beneficial later.
Interested in learning more about how to save for your retirement? Contact Dewitt & Dunn today to schedule a complimentary appointment with one of our experts.