What Can You Do About Your 2017 Taxes at the Absolute Last Minute?
With those last seconds on the clock literally ticking down as you read this, you might be thinking about a lot of things: what you’re happy to leave behind in 2017, your New Year’s resolutions, and making those plans for watching the ball drop or attending a fun party. But if you’re finance-conscious or looking to become more financially literate, you’re also wondering what you can do before the year’s up to save on your taxes at the last minute.
You still got some time before you have to get your documents ready for preparing your tax return as there are a couple weeks before the IRS opens up for return acceptance. But if you’re seeking out some transactional maneuvers to take advantage of before the new year, here’s what you can do.
- Make those last-minute charitable donations. Any donations that you make now will count towards your 2017 taxes, even if you use a credit card and don’t pay the bill until next year.
- Get married for some major tax benefits. Obviously, don’t marry for the sake of it! But if your partner popped the question recently, if you get married as late as New Year’s Eve you’re still considered married for the entire year for tax purposes. There are some situations where there’s a marriage penalty opposed to benefit, so you should weigh your options and see if you’d benefit more from waiting or running off to Vegas to get married in a hurry.
- Cash out a CD if you anticipate needing help with January credit card bills. Certificates of deposit (CDs) incur an early withdrawal fee if you cash them out before they mature. Regardless of whether you itemize deductions or not, you can deduct this early withdrawal fee.
- If you’re self-employed or got a side hustle, invest in things you’re going to need. Schedule those workshops and conferences (and make those subsequent travel arrangements) buy a new laptop, and renew those memberships if you think you’re going to need those business expenses more now than in 2018.
- Contribute to an IRA. Don’t have an IRA yet? You can start one now! Making a last-minute contribution will still count for the whole year.
- Defer any income if necessary. Depending on what you expect next year to look like in terms of income and deductions, it may behoove you to defer income if possible. If you freelance and got a client who hasn’t paid you yet, ask if they can defer payment until January.
Happy Tax wishes you a happy and healthy New Year, and we strive to help you get optimal tax savings whether it’s far in advance or literally at the last minute.