The holidays might be just around the corner, but tax day isn’t as far off as you may think. Now is the time you should be doing some planning to make next April a little smoother. The sooner you get started, the better off you will be.
The tax laws have definitely changed, but there are still some things you can do to maximize your refund:
- Tax credit for energy savings – If you install a solar system, you can get a credit for 30% of the cost. Check out energystar.gov for other similar programs.
- Harvest tax losses – Use stock market losses to offset gains elsewhere, or to reduce you taxable income. If you’d like, you may wait until the end of the calendar year, but start looking at things right away to get a head start.
- Max out your retirement plan – You may have until April to max out your IRA, but you only have until year-end to max out your workplace 401k. You may contribute $19k if you are under 50 years old, and up to $24k if you will be 50 by December 31. If you up your contributions now, you can spread the pain of catching up over a few months.
- Donations – Again, you may wait until year-end to donate, but with the holidays around the corner, now is really the best time to start going through the things you want to give to charity. Also, if you plan to donate cash, spreading it out will lessen the financial burden.
Bottom line: make sure you have a good look at these tasks and have a solid plan in place before the craziness of the holidays hits.