It’s no secret that it has been a tough year for so many, particularly related to finances. As another tax year comes to an end, here are a few tips that you can complete now that will save you some money later. If you have any questions feel free to give us a call at (763) 325-4400.
1. Increase what you contribute to your retirement: Putting money away into a retirement account has multiple benefits. First, it allows you to reduce your taxable income (by the amount you contribute) and second, you are saving money for your future. Our advice is to put as much as you can in your retirement fund each year. You should also note that you have until April 15th, 2021 to set up an IRA and contribute as still have it count toward the 2020 tax year.
2. Contribute as much as possible to a health savings plan: Another excellent option for reducing your taxable income is contributing to a health savings plan. This can help you plan for unexpected medical costs and not get caught with a large hospital bill that you cannot easily pay. Your contributions go into your account pre-tax and then you can spend these funds tax-free.
3. Tax advantage of tax credits: 2020 has been an unusual year and there are new tax credits that you can take advantage of, thanks to the CARES Act. In addition, those who pay for childcare may be able to take advantage of the Child and Dependent Care Tax Credit. A tax professional will be able to review your information and make sure that you maximize any potential tax credits and deductions.
4. Get organized now: While the information is still fresh, take time to get organized. Keep your tax documents in one place so when the new year comes, you will have everything at your fingertips.
5. Partner with an experienced tax firm that will get to know you: If you need tax assistance, now is a great time to find a tax support firm that will give you what you need. Havig Tax will spend time getting to know you and understanding your finances and your goals, so that we can make tax recommendations that work well for you. Our team stays current on all new tax laws and can guide you through the tax planning and preparation process from start to finish.
If you would like to schedule a time to speak with a member of our team, call 763-325-4400. We offer a free consultation to ask questions and see if working together makes sense for you.