Time for Tax Planning

While the summer is starting to wind down and memories of vacations and beach days are still fresh in everyone’s mind, now is a great time to begin to think about your taxes. Sure, tax day is still a long ways off, but what you do now will set yourself up for next April.

One example of this is installing a solar system on your roof. This will net you a tax credit of 30% of the total cost. This isn’t the only way to save. To see other energy-related tax savings, visit energystar.gov.

Are you aware of all the tax changes this year and how they affect you? If not, make sure you take the time to do so. Understanding every change isn’t as important as understanding how the law affects you personally. There is plenty of information available on the web, or better yet, talk to your accountant if you have one.

Another thing to examine before the end of the year is your retirement plan. You have until next April to fund your IRA, but you only have until December 31 to max out your 401(k). You can contribute up to $18,500 annually to your 401(k) if you are under 50 and up to $24,500 if you will be 50 by the end of the year.

Next are donations. Waiting until the end of the year is usually not the best idea. Items can get lost amidst holiday decorations and shopping items. Plus, why deal with the crowds when you can donate your unwanted items earlier in the year? Also, if you are going to be donating cash, spreading it out over the remainder of the year will help ease the pain.

This may seem like a strange time of year to talk about taxes, but when the year ends, so does your chance to make any changes to help ease your tax burden next April. So start taking stock of things now, and don’t wait until it’s too late.

About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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