It is officially tax time! There are only two viable options: either face it and file taxes on time, or procrastinate on it longer, by asking for an extension. If you do choose to “procrastinate on it” make sure to make an estimated payment to avoid late payment penalties before either, 3/15 for 1120 corporate tax returns, or 4/15 for your personal income taxes.
Whether you chose to file and pay now or later, there is good news about paying taxes. Yes, I said it, good news. Here are some possible ways to save money at the time of paying your taxes. Track Medical Expenses: We recommend to track your medical expenses, as a certain amount of health-related expenses and supplies are tax deductible. Health Premiums, glasses, dental costs, medical costs, adding a wheelchair ramp, lowering counters widening a doorway, or installing hand controls for a car, travel incurred for medical costs are some examples.
- Keeping your mortgage for as long as possible: the interest you pay every month for your mortgage is tax deductible. Depending on your financial situation, you can determine whether paying off the mortgage, in the case you can afford it, or not, and thus, using the tax benefit. We like the tax benefit but only if all of your “Itemized Deductions” are large than your “Standard Deduction” for your filing status will really make a difference. The big benefit is if you can sell for a gain of $250,000 (single taxpayer) or $500,000 (married).
- Invest in Permanent Life insurance for your family’s possibly guaranteed tax-free security and for tax-free loans on insurance cash surrender value, while you are alive…
- Put Money into college savings: also known as qualified tuition plans can be set up usually in two forms, a prepaid tuition plan or a 529 college saving plan.
- Prepaid Tuition Plan: by making college savings payments in advance many years before the student enrolls at a participant public college. You pay and lock in your child’s future state university education at today’s costs. We like this plan, because once you enroll, the value of the plan is not subject to stock market volatility. This plan generally has residency requirements.
- College Saving Plan: you establish an “qualified” 529 college plan account for a student(s) future college expenses but these investment contributions are subject to market volatility. They can generally be used at any college or university, no matter of the state of taxpayer’s residency and is transferrable amongst family members, unlike the Prepaid College Plans.
- Boost your retirement savings: reduce your current or future retirement taxable income by contributing money into Individual Retirement Account or better yet, max out your contributions to a corporate employer provided retirement plan. Call us to find out the maximum amount you can contribute to your 401(k) or any retirement saving plan and save on taxes.
- Investments or Damages: Keep good records of all investments into real estate, stocks, closely held business investments, insurance loss claims, theft or damages, and insurance reimbursements professional consultants and mush more. Ask us, if you are unsure.
- Keep track of new job search and related moving expenses: If you are unemployed, make sure to track the cost you incur to look for a new job, (first job does not qualify). if you are looking for a position in the same line of work you can deduct some expenses related with the search. The expenses to deduct for job searching includes travel, cost of food, loading and transportation. If you move because your new job is at least 50 miles farther from home than your previous job, you can deduct the moving costs as well.
For more possible deductions, contact us for a FREE Comprehensive Client Tax Organizer we can email to you.
At Rosillo & Associates, we want to analyze the advantages and disadvantages of each possible tax deduction available to you to cut tax costs as much as legally possible. The above list shows only a few of the many ways to save. The best approach is to consult with a tax specialist, who can coach you in directions that may provide your optimal tax savings, safely. Call us today; we are ready to set up a customized tax plan for you, your family, your estate, and your business.