10 Last-Minute Tax Savings Opportunities

No matter your circumstance, a goal you should have is to realize tax savings by taking advantage of some proven year-end tips to reduce your taxable income.  Let’s dive in!

1. Be Sure to Take Last-Minute Deductions

When you prepare your annual tax return, you must tally all available sources of taxable income to arrive at your gross income. 

2. Be Mindful of the Alternative Minimum Tax (AMT)

The AMT originally came into being as a way to make sure wealthy taxpayers don’t use too many legal deductions to drive down their tax bill to unreasonable levels.  However, with time, more and more middle-class people have become affected by it.

3. Buy Low, Sell Low

To find more tax savings from your losing investments, you need to sell them to offset any capital gains you’ve recognized during the year.  Alternatively, you can deduct up to $3,000 in capital losses against your taxable income.

4. Contribute the Maximum to Available Retirement Accounts

By contributing the maximum to your traditional retirement accounts each year, you can receive some tax savings by reducing your taxable income.

5. Avoid Paying the “Kiddie Tax”

In order to prevent Mom and Dad from shifting their investment income to their children to hide gains, Congress created “kiddie tax” rules.  This makes any income earned by children taxable at a higher tax rate than they otherwise would as a non-dependent.

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