Saving money in the weeks leading up to Christmas may sound like an oxymoron. However, with less than three weeks left in 2013, there are things individuals can do to save money in the long run. Symmetry Software’s resident tax expert, Samuel Kerch, also known as Ask CPA Sam, details five tips individuals can pursue in the last days of 2013 in order to save money. 1.Make your mortgage payments early. For some people, making mortgage payments early will increase their itemized deductions and decrease their taxable income, meaning they will pay less in taxes. Such a move could be as simple as wiring or sending the mortgage funds 2 days early to have the payment record in the current tax year.
2.Maximize 401(k) contributions. For folks who have not yet reached the annual contribution limit to 401(k) plans and can afford to do so, putting as much money as possible into your 401(k) plan will reduce federal and most state taxable income. Reducing your taxable income means you will owe less in taxes. For those with IRA plans, you have until tax day in April to make contributions for this tax year.
3.Sell your loss securities to offset capital gains. If you have capital gains from stock sales through the year, you may try selling some of your loss securities to offset a portion of this gain.
4.Spend your Flexible Spending Account (FSA) funds. Don’t lose the money you set aside tax free in your FSA. If you have a balance, schedule doctor, dentist, or eye appointments to make sure you put that money to use and don’t lose it at the end of the year.
5.Make charitable contributions of non-cash items. If you have stuff laying around the house that you just don't need and a yard sale is not going to happen, consider donating those items to a charity. Make sure you have a good itemization of the donation for tax time! Non-cash items can include non-perishable food items. Making donations such as these can both improve your tax situation and support those in need during the holiday season. We’re curious to hear from you, what do you plan to do towards the end of 2013 to save money? Let us know at Facebook.com/PaycheckCity.
These free resources should not be taken as tax or legal advice. Content provided is intended as general information. Tax regulations and laws change and the impact of laws can vary. Consult a tax advisor, CPA or lawyer for guidance on your specific situation.