Before we know it, we’ll be celebrating Christmas and then ringing in 2018 as the calendar year comes to an end. And early on in 2018, Americans can expect to be receiving W-2s from their employers, and other important tax documents from their banks, mortgage lenders and more.
Yes, with the holidays fast approaching, we’re currently in the midst of the most wonderful time of the year. But before too long, it’s going to be tax season. Naturally, we all want the biggest refund possible when it comes to filing our 2017 year taxes. The good news is that there are a lot of simple things you can be doing now to boost your refund check come time to file.
Here’s a closer look at some end of the year tips to boost your tax return:
Defer Bonuses
The more you make, the more you pay in taxes – that’s a fact. But, the IRS classifies Americans into various tax brackets based on how much their households earn. Noting this, if you have a bonus check coming to you at the end of the year, and you’re at the cusp of being bumped into a higher tax bracket from it, it may be worthwhile to consider asking your employer if you can defer the check until next year.
Yes, you may just be punting the bonus down the road for you to worry about when you file your 2018 taxes, but if you’re in a business like sales where your earnings fluctuate from year to year, it can be a worthwhile option to pursue.
Donate
You’re due to be getting a lot of new stuff for Christmas, which makes it a perfect time to go through your old things and get rid of what you no longer need. Just make sure to make any of your item drop offs (or schedule any pickups) prior to January 1, 2018, so you can claim the deduction on your 2017 taxes. Additionally, keep in mind that you can deduct mileage driven to the charitable service you drop off at.
On this note, take stock of any charitable giving you do around the holidays (or have done throughout the year). Make sure you find those receipts, as you can write off the amount you gave on your taxes.
Pay Tuition Now
If you’re in school or voluntarily take a course to help grow your business or learn a new work-related skill, it’s always best to pay the tuition prior to the end of the year. That’s because in most cases, the cost of tuition can be deducted from your taxes, so you can reap the benefits of such immediately rather than wait until you file your 2018 return.
Pay the Difference in Property Taxes
Home values across the nation are largely on the rise, which means that property taxes are also on the rise. Around this time of year, it’s not uncommon to receive a notification from your municipality or mortgage company notifying you either of additional property taxes you might owe or of a shortage in your escrow account.
If you get this notification from your mortgage lender, they’ll offer you the option of settling the difference now or rolling the difference into your monthly payments for next year. If you’re able, opt to pay the difference this year. This way, you’ll be able to write this amount off on your 2017 taxes.
Look for Deductions
Do you use an office area exclusively as part of your business? If so, then you’re likely eligible to receive a home office deduction. But, the IRS has strict eligibility requirements. For instance, when we say “exclusively” as part of your business, the IRS means it. If anything but work for your business is conducted in the designated office space, than you’re no longer eligible for the deduction.
If you are eligible for such a deduction, it’s a really nice one. The deductions are based on the square foot percentage of your home used as your office, and you’re able to deduct direct expenses, indirect expenses and more. Just be certain that you qualify for the deduction before you do your taxes.
It’s hard to believe that 2017 is nearly over and tax season will soon be upon us. Now’s the time to take the steps to max out that tax refund.
Regards,
Ethan Warrick
Editor
Wealth Authority
