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The end of the year is the best time to analyze your financial situation and plan for the next year

Accounting Tax Payroll News Published: 19 November 2014

The end of the year is the best time to analyze your financial situation and plan for the next year. Taking care of financials on time will help you to reduce stress levels and even save on taxes. It’s very important to make it a habit to perform your end of year financial check up and below are some useful tips to help you get started: 1. Gather your itemized deductions. A lot of expenses can be deducted only if they exceed a certain percentage of your adjusted gross income. Fitting itemized deductible expenses into one calendar year can help you exceed these levels. 2. Open a retirement account. Retirement accounts offer some of the best tax saving benefits. Contributions reduce taxable income when you make them, and you won’t have to pay taxes until you take the money out at retirement. 3. Switch to a Roth IRA. It has become very popular in recent years to convert a traditional IRA into a Roth IRA. This will let you pay tax on the conversion in exchange for no taxes in the future with proper made withdrawals. 4. Convert home into an office. Some of the costs of your home when using it as your principal place of business are tax deductible. IRS allows to deduct up to $5 per square foot of home office space up to $1,500 per year. 5. “Gifting Tax.” Gifting up to $14,000 to as many people as you wish free of gift or estate tax. You can also combine gifts with a spouse and children.

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