Raymond James Certified Financial Planner Dennis Briggs says number one at the top of his yearend-tax tip list is harvest you tax losses by selling your losing stock.
You can write off up to $3000 in ordinary income, the taxable income is reduced by the amount of your losses.
This can be done in a variety of ways, by cleaning out your garage or writing a check to your favorite church or charity. But if you are 70-and-a-half years old or older, you can save more tax dollars by gifting your Required Minimum Distribution directly from your retirement account.
And if you have not already maximize your retirement contributions, one of the best tax reducing tools for those who have money left over after Christmas is to deposit it into your IRA or 401k account.
For those younger than 50, maximum IRA contributions are 5k and for 401k accounts the limit is 18k for the year and 24k for those older than 50.
You can also choose to fund your 529 plan for your child’s college education as it is a tax deferred tool as well.
Although it's not exclusive to the end of the year, one smart tax tip that everyone should consider is adjusting their tax withholding status to match their taxable income. This way you do not allow Uncle Sam to hold on to your money all year long and miss out on interest you could be earning on it.
