How Can I Improve My Tax Situation for Next Year?

If your tax return was a target, the bullseye would be $0. You don’t want a giant tax bill—that means you didn’t have enough money taken out of your paycheck for taxes. And that huge tax refund? That’s not free money—it’s your money, which you’ve been loaning too much of to the government throughout the year (with no interest, by the way).

Great tax professionals won’t just help you file your taxes, collect their fee, and then disappear. They’ll be there after you file to answer your questions about your tax situation. Not only that, they can show you how to adjust your tax withholdings and get closer to that sweet spot where you’re paying almost exactly what you owe to Uncle Sam—no more and no less.

Your tax pro can suggest making some tweaks in different areas of your finances. They can walk you through how your investments are taxed, the tax implications of buying or selling a home, or when it’s a good time to incorporate your side hustle into a small business.

Here are some things you might want to pay now so you can benefit later.

Like Ferris Bueller once said, “Life comes at you fast.” And if you don’t stop and look around once in a while, you could miss out on some big tax breaks or adjustments you need to make during any given tax year.

Did you get married, have a baby, or buy a house in the past year? Those are just a few major life changes that can change your tax situation—and your tax pro can help you understand what those changes mean for you.

And beyond taxes, your tax pro could also suggest taking steps to help protect your assets or help you make more progress on your financial goals for the rest of the year. Maybe you need to get term life insurance once you get hitched or set up a trust to protect your estate. Your tax pro can provide some really valuable insight into those areas!

529 contributions

Dozens of states offer tax benefits to people who contribute to 529 college savings plans, and many have a Dec. 31 deadline for those contributions.

Your mortgage

Couples filing jointly can deduct the interest paid on qualified residence loans of up to $1 million, depending on when they were secured. (If you file separately, you can deduct interest on as much as $500,000 of the indebtedness.) 

Quarterly estimated taxes

Fourth-quarter estimated tax payments are due Jan. 15. But some experts say you might want to avoid procrastinating. If you make your state payment this month, you’re technically meeting the deadline and getting it in before the end of the year. That means you can deduct the payment on your 2020 federal income tax return.

“By making a ‘prepayment’ of your state estimated tax payment for the fourth quarter two weeks earlier, you have accelerated the ability to deduct the payment by a year,” Savage says.

Fresno Financial Consultant Takeaways 

Soutas Financial your Fresno financial planner would like to remind you of these great pointers: Your tax pro can suggest making some tweaks in different areas of your finances. They can walk you through how your investments are taxed, the tax implications of buying or selling a home, or when it’s a good time to incorporate your side hustle into a small business. And beyond taxes, your tax pro could also suggest taking steps to help protect your assets or help you make more progress on your financial goals for the rest of the year.

Diversifying your retirement assets among a variety of vehicles and alternatives—both insurance and investment oriented, depending on what is appropriate for your situation—may offer you a better chance of meeting your retirement income goals throughout your lifespan. We help our clients with problems sometimes associated with retirement such as stopping spend down and avoiding probate. In doing so we leverage Medicare long term care as well as risk management designed to help accomplish those goals.

When searching for Fresno financial advisors, look no further than Soutas Financial & Insurance Solutions Inc. your Fresno financial advisor is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment strategies that focus on Asset Protection, Long-Term Care Strategies, Legacy Planning, Tax-Efficient, Strategies IRA, 401(k) & 403(b) Rollovers, Life Insurance, Annuities, Medicare, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173      -939480 – 06/21

Other Fresno Financial Advisor Articles 

Soutas Financial & Insurance Solutions Inc. 
333 W. Shaw Avenue Suite 106
Fresno, CA 93704 
(559) 230-1648 
Soutas.com 

Our firm is not affiliated with the U.S. government or any governmental agency. Individuals are encouraged to consult with a qualified professional before taking any withdrawals from their retirement assets or insurance policies.

via Make These 6 Money Moves in December to Maximize Your 2020 Tax Benefits

via 8 Questions to Ask Your Tax Advisor