10 year-end tax moves to make
April 15 is the target date for taxes, but to ensure that you pay the Internal Revenue Service the least possible amount on that date, you need to make some tax moves before the tax year ends.
The good news this year is that the federal tax laws are in place, unlike at the end of 2012, when Congress was still fighting over legislation.
The bad news is that if you earn a lot of money, you could face some new taxes.
The best news, regardless of your income level, is that you still have time -- until Dec. 31 -- to reduce your tax bill.
Some tax moves will take a little planning. Others are very easy to accomplish. But all are worth checking out to see if they can reduce your tax bill.
Following are 10 year-end tax moves to make before New Year’s Day.
10 tax moves to make now
- Bunch your deductible expenses
- Go shopping
- Be generous
- Pay college costs early
- Adjust your withholding
- Defer your income
- Add to your 401(k)
- Review your FSA amounts
- Harvest tax losses
- Make the most of your home
1. Defer your income
The top tax rate is 39.6 percent on taxable income of more than $400,000 for single taxpayers; $450,000 for married couples filing joint returns ($225,000 if filing separately); and $425,000 for head-of-household taxpayers.If your remaining pay will push you into the top tax bracket, defer receipt of money where you can.
Ask your boss to hold your bonus until January. Put more money into your tax-deferred workplace retirement plan. Hold off on selling assets that will produce a capital gain. If you're self-employed, don't send out invoices for year-end jobs until early 2014.