During the holidays, people are often concerned with finding nice gifts for the people closest to them and spending time with loved ones, whether it’s with the family in their home or virtually with people across the country. However, as much as you might want to only think about fun, you should also be thinking about your taxes, at least a bit.
Below, you’ll find several important tax tips you’ll want to keep in mind for the holidays this year.
Give to Charity
If you have the means, it’s a wonderful time to consider giving to charity, particularly this year when so many people have been financially and physically impacted by the coronavirus. You’ll also find that when you give to charity, it can help you to lower your taxes, while still providing support for a cause that’s important to you. Charitable giving is a good option for businesses and individuals alike.
Pay Property Taxes Early
If you itemize your deductions, you might want to pay your property taxes early. When you pay these taxes before the end of December, you could deduct them on your taxes in the coming year. This is something to keep in mind for each holiday season going forward.
Max the Retirement Savings
A good way to decrease your taxable income, which will mean paying less in taxes, is to contribute the maximum amount that you can to your retirement fund. In 2020, the max most people can contribute is $19,500. However, those who are 55 and older can contribute an added $6,500 as a catch-up contribution.
Your Home Office
Many people have had to transition and work from home this year, and that means you likely have a home office. If you have an area of your home that you use as an office, you may be able to write it off. This same would be true of other expenses for work that you’re now paying for.
Start Getting Organized Now
Tax tips for the holidays aren’t just about finding ways that you can pay less in taxes. The tips will also help you to become better prepared for when you have to take care of your taxes. No one likes to do their taxes, and most people put it off until the last minute. Unfortunately, this means they’re running around and trying to find everything they need. This is a major problem and it can result in mistakes.
Instead, start to gather your receipts and all of the other documentation that you need. Put it all in the same location, so when it comes time to handle the taxes later, you’ll have what you need ready to go. This can help to reduce your stress levels and your future self will thank you.
If you would like to learn more about how you can optimize your taxes and other tips that you can use, get in touch with Venture CPAs Denver. We have the knowledge and experience to help you with your accounting and tax needs.