Summer is flying by already. Do you feel that way?
There can only be so many beach days in the year for most of us in the West Michigan area. And whether you’re BBQing in the back yard or traveling a little bit, before you know it July is almost over.
How does it all go by so fast?
With all of those warm-weather to-do lists, our finances are sometimes the last thing on our minds. However, if you can find some time amidst the craziness, please consider the following four tax moves for lowering next year’s tax bill!
If some (or all) of these are unfamiliar to you, please reach out – we can tackle them together. These aren’t difficult items but do take some intentionality.
Let’s meet before summer’s end and chip away at your tax bill.
(or shoot us an email through the link at the top of the page)
Now, on with some advice . . .
Four Great Summer Tax Moves For Folks in West Michigan
“We keep moving forward, opening new doors, and doing new things, because we’re curious and curiosity keeps leading us down new paths.” -Walt Disney
Let’s dive right in, since it really is hot out there…
Bunches & Bunches
If you’re not familiar with a bunching strategy, it helps you meet itemized deduction thresholds. Essentially, you bring in as many allowable expenses as you can into a taxable year.
If you itemize, we’ll want to pay careful attention to your medical expenses.
Making an additional mortgage payment or two before year’s end can also be claimed as an itemized deduction. And, of course, your donations to IRS-approved charities are deductible.
Side: Speaking of donations, this is a great time to take some clutter (clothes, keyboards, etc.) out of those closets and donate to those West Michigan charities!
This is one where it would be especially helpful to have someone like me walk you through it. Why? Because the TCJA strikes again.
The new law limits tax-deduction value of home equity loans. Therefore, interest is only claimed on Schedule A where the money borrowed is used to improve the home. If that’s confusing to you, we understand–give us a call and we can go over it in-depth.
Re-Focus on Retirement Funds
Did you know inflation makes it so you’re able to add more to your workplace 401(k) and other retirement funds like a Roth IRA?
On that note, you might want to convert your IRA to a Roth since ordinary tax rates are lower than they have been in many years. But let’s chat before you do that . . . As of the TCJA, you cannot undo Roth conversions.
Yes, we’ve talked about this before. But it really is so important.
Whether you received a bigger refund this year or had to pay up, it’s important to make sure your withholding is accurate. Feel free to use this IRS Withholding Calculator or just reach out to Forrest Tax and we can sit down together and figure it out.
The moral of the story? Keep enjoying every minute of your summer…BUT…enjoy NEXT summer even more with the cash you’ll save on your taxes in the coming year.
Forrest Tax & Accounting Services