Want to Save Money? Here’s How to Plan Your Taxes Early

We’ve officially entered July, and we’re starting to come to the realization that we’re halfway through the year… we don’t know how it happened but we do know this.

Being proactive in your tax planning now can make a significant difference in reducing your 2024 tax bill (and your stress!)

Are you wondering how to make the most of the second half of the year financially? Feeling anxious about potential tax surprises next year?

It may seem early to start thinking about your tax situation while you’re soaking up the summer sun, but we’re here to tell you that taking proactive steps now can help your future self.

Early tax planning is key. Trust us, we’ve had too many people come into our office in April with their hair on fire, scrambling to sort out their taxes at the last minute.

Don’t lose your hair over tax season! Begin planning now to avoid stress and potentially reduce your tax bill for 2024.

We are here to help make this process as simple and beneficial as possible, so you can enjoy peace of mind knowing you’re on the right track.

Adjust Your Tax Withholding or Estimated Payments

No one likes surprises when it comes to taxes, especially not a large bill at the end of the year.

If you’ve had changes in your income, now’s the time to adjust your tax withholding or estimated payments

Using IRS Form W-4, you can ensure the correct amount is withheld from your paycheck. The IRS’s Tax Withholding Estimator is a useful tool to help with this, but for more precise results, we can assist with a 2024 tax projection.

If you make estimated tax payments, particularly if you’re self-employed, we can help you review and adjust your payments to avoid underpaying or overpaying.

Maximize Your Deductions with Strategic Spending

The standard deduction amounts for 2024 are quite generous, but if your itemized deductions are close, consider making additional expenditures before year-end to exceed your standard deduction.

This could include prepaying your January mortgage payment to get 13 months of interest in 2024, prepaying state and local taxes due early next year (keep in mind this deduction limits), making larger charitable donations this year, or accelerating medical expenses.

Remember, careful planning here can significantly lower your tax bill for the year.

Manage Investment Gains and Losses

If you have investments in taxable accounts, consider the tax implications of selling appreciated securities held for over 12 months.

Long-term capital gains are taxed at a lower rate than short-term gains.

If you’ve incurred capital losses earlier this year or have loss carryovers, selling winners now can offset those losses, minimizing your tax liability.

Conversely, if you have losing investments, selling them can provide valuable tax loss deductions.

It’s also beneficial to consider gifting appreciated securities to family members in lower tax brackets or to charities, as this can provide significant tax advantages.

How to Take Action TODAY

To take control of your taxes now, be sure to contact us today to save you headaches and money in the long run. Our team is ready to provide personalized advice and support tailored to your unique financial situation.

Don’t wait until the last minute – reach out to us today to start planning and ensure you’re making the most of your tax-saving opportunities for 2024.

The information provided in this blog post was sourced from Thomson Reuters.