Finance & Enjoyment Blog

Denver CPA Firm on 5 Year-end Tax Tips

As we bid farewell to 2014 and get ready for the holidays, it is also a time to tie up loose ends in your financial house. As a Denver CPA firm, we have put together some practical tips for your year-end tax deductions that will, hopefully, make next April a little more bearable.

Charitable Giving

If you think your tax return could use a little boost, giving to charities is a great way to add deductions to your tax return. You can give all the way up to December 31st. So, while pulling out the holiday decorations, you can also clean out your garage by donating old clothes and used household items. If you have an old car you were planning on getting rid of, many charities will take them off your hands. You can also send donations to your favorite charity organizations.

Give to Others

Also in the vein of giving, you can give up to $14,000 to as many individuals as you like without filing a gift-tax return. Again, you can do this all the way up to December 31st. If you are married, you and your spouse can give up to $28,000 per individual. You are not limited to only giving to members of your family. You can give to any individual.

Contribute to your 401(K)

It is never too late to boost your retirement savings as a long-term investment rule. But, in the short-term, you can increase your contributions at the end of the year, assuming you have not already maxed out your yearly contributions. As contributions to most 401(K) plans are excluded from your income, this can help lower your tax bill in 2015.

Pay Early Tuition

If you have a kid in college, you may find that the Spring semester’s bill is not due until after the new year. But, it could be wise to pay that bill before the end of the year. This will allow you to claim the American Opportunity Tax Credit on this year’s tax return. Tuition, fees and course materials for four years of undergraduate studies are eligible expenses under the American Opportunity credit. This includes education expenses made during the current tax year, as well as expenses paid toward classes that begin in the first three months of the next year.

Adjust Your Withholding

Think back to last April. Did you have to write a big check to the IRS? Or did you get a big check from them? If either was true last year, it is not necessarily good financial balance. Unless you adjusted your withholdings from your paycheck, you could see a repeat of the situation in April. Most people cover their tax bills through payroll withholdings. Ideally, you want the amount coming out of your paycheck to be as close as possible to your final tax bill. Too much withholdings mean you get a refund. Too little, and you will owe the IRS.

How to Use This Information

At KKB, we want to help you get through taxes season as well as possible. Our team can look at your entire financial picture and help ensure that you are not paying too much of your hard earned dollars to the IRS. To learn more about our tax planning and preparation services, call us at 303-815-1100.

What are other ways you make year-end deductions?

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