Maximize Your Tax Savings With Tips From Expert Tax Advisors

Getting tax advice is a smart move that can save you thousands. However, not all tax professionals are created equal. Look for someone who lives, eats, and breathes taxes.

Wichita Tax Advisors should deeply understand tax laws and regulations and how they apply to your situation. They will also keep you in the loop throughout the year, alerting you to new tax-saving opportunities.

Review Your Previous Year’s Taxes

Many people must realize that several tax-saving strategies can save them money yearly. This is particularly true if they own a business.

One way is to use deductible losses to offset capital gains up to a maximum of $3,000 annually. This is called “tax loss harvesting.” Another is accelerating taxable expenses into the current year, which can help lower your current-year tax liability.

You can also maximize your deductions by contributing to retirement accounts. This includes employer-sponsored plans, 401(k), and individual retirement accounts (IRAs). Self-employed taxpayers can use the self-employed retirement account (SEP) or simplified employee pension (SEP IRA). Depending on your situation, you can funnel pretax dollars into flexible spending accounts for medical expenses, daycare, and more. However, you’ll forfeit what you don’t use by the end of the year. You can even donate appreciated assets like stocks to qualify for a tax deduction.

Don’t Underestimate Your Deductions

Whether you work as an employee or run your own business, keeping track of every eligible expense can help you maximize deductions and reduce taxable income, whether it’s a home office write-off, reinvested dividends, or accelerated expenses (like buying supplies in December to use throughout 2024), every dollar counts.

Also, remember tax credits, which are even more valuable than deductions because they reduce the taxes you owe on a dollar-for-dollar basis. Take advantage of education and energy credits, the child credit, and more. Be sure to consider your filing status and be aware of life events like marriage, divorce, or children’s births that could change your eligibility for certain deductions. It is always important to consult a qualified tax advisor about your situation.

Keep Track of Your Expenses

Keeping track of expenses is a crucial part of financial health. This will not only help you work toward your goals, but it will also help you manage your taxes.

It’s essential to record your expenses throughout the year and save receipts. This will not only help you avoid overpaying at tax time, but it’ll also prove invaluable in the event of an IRS audit.

A professional tax advisor can save you hundreds or even thousands of dollars. But you must ensure they understand your financial situation and offer tailored advice.

Consider setting up separate financial accounts for your business transactions if you’re a business owner. You’ll need a business checking account, a savings account, and a merchant services account (for handling card transactions from customers). This will help you keep better track of your expenses. You can then claim them as deductions at tax time. It would help if you also considered making charitably-minded donations to qualified charities before the end of the year.

Make the Most of Your Tax Refund

Millions of Americans are expecting a tax refund this year. But how can you make the most of it?

One way is to boost your savings by depositing your refund into a retirement or 529 plan. This is smart because it allows you to earn investment returns on tax-deferred terms.

Another is to use your refund to pay down debt. This is a great way to reduce interest expenses and improve your credit score.

Finally, you can invest your refund by saving for future education costs. If you have children or grandchildren, this can help you get ahead with college expenses.

By reviewing your taxes and implementing tax strategies that maximize your return, you can keep more of your hard-earned money in your pockets. It’s worth speaking with a trusted tax advisor and getting regular check-ins to ensure your strategies work. The best advice will be tailored to your unique situation.