Owners have time to squeeze in a few more tax breaks before this year comes to a close. Here are a few tips.
Although 2017 is creeping up fast, it’s not too late to gain last-minute tax benefits.
Here are five tax breaks you can still get before the year’s out, according to USA Today.
LEARN MORE ABOUT TAX BENEFITS.
1. Retirement plan contributions
Money put toward retirement plans can be counted as a deduction. “If you’re under 50, you can contribute up to $18,000 in 2016 to a 401(k) and $5,500 to an IRA. If you’re 50 or older, you’re allowed to put up to $24,000 into a 401(k) and $6,500 into an IRA,” according to USA Today.
But don’t wait—processing can take a few weeks, so it’s best to get started as soon as possible.
2. Flexible spending benefits
It may seem like it’s too late to add any more money into your flexible spending account (FSA) this year, but a qualifying life event may change that. Did you get married or have a baby after you made your initial election on your FSA? If so, then you may be eligible to put more money into your FSA before the year is out.
But remember, “if you’re going to add more money to your FSA, just make sure you have enough time and eligible expenses to deplete your balance by the end of your plan year; otherwise you risk forfeiting the remainder,” USA Today reports.
3. Charitable contributions
’Tis the season for giving—but being charitable could also work out in your favor. “As long as you itemize deductions on your taxes, you can write off contributions to registered charities you support,” USA Today reports. Just remember to keep documentation of every donation.
4. Unloading losses to offset gains
A concept known as tax loss harvesting “lets you claim investment-related losses on your tax return as long as you sell the money-losing investment at some point during the year,” according to The Motley Fool, a blog for financial advice.
Also, “if you have extra losses that you don’t need to offset gains, you can use up to $3,000 more of those losses to offset other types of income.”
5. Paying college costs early
Although you may not need to start paying off your tuition bills just yet, doing so now “could result in a tax break if you’re eligible for the American Opportunity Tax Credit.” If you meet the set criteria, “you may be eligible for a credit equal to 100 percent of the first $2,000 you spend on qualified education expenses per student, plus 25 percent of the next $2,000,” according to The Motley Fool.
Additionally, “40 percent of the American Opportunity Tax Credit is refundable, which means that if your tax liability falls below zero, you’ll get a check from the Internal Revenue Service for the difference.”
6. Equipment expenses
Earlier this year, Congress passed a tax deduction called Section 179, which permanently allows small businesses to expense equipment costs of up to $500,000 a year. The goal was to make it easier for small businesses to buy tangible business equipment, including everything from office furniture and computers to vehicles and machinery.
Related:
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Small Business Taxes Under Pres. Trump: What Will the System Look Like?
