Tax season isn’t until April, but the deadline will approach faster than you expect. Now that we are nearing the end of 2018, it is time to think about your approach for paying this year’s taxes. It is in your best interests to minimize the amount of taxes you owe. You can follow a few important, simple steps to reduce what you will owe in 2019.
- Update your W-4
The first step is to double-check your withholding. If necessary, update your form W-4. Then, use line 6 of the form to state the amount. If you wish, you can revisit your W-4s in the future to remove the withholding.
- Maximize your contributions
Contributing to your retirement account can significantly reduce the amount of taxes you must pay. Contribute to your IRA, FSA or other “use-it-or-lose-it” fund. This way, less of your income can be taxed, and you will boost the amount in your retirement fund.
- Make charitable gifts
You can also reduce your taxable income by making charitable donations. You can make tax-deductible gifts to organizations that assist causes close to your heart. You can also gift your money—up to $15,000—to an unlimited number of beneficiaries every year.
- Seek outside counsel
Many taxpayers choose to file without consulting a financial advisor or attorney. However, you may inadvertently be paying more taxes than necessary. An outside tax professional can advise you on how to minimize the amount that you owe. They can also help the complex process of filing taxes go more smoothly and quickly.