5 Smart Year-End Tax Moves To Prepare For 2018

As the year ends, you might not be thinking about tax season yet, but it’s the best time to make decisions that will benefit you when you are filing your taxes in April.

Automate Your Finances

If you have not already, set up cloud accounting software that will make your accounting a snap. Quickbooks is the most popular choice because it is compatible with PayPal and will automatically categorize your credit and debit card transactions.

Contribute to Your 401(k)

Contributions made to your 401(k) before December 31st will be considered for the 2017 tax year. So, now’s the time to contribute – you’ll lower your adjusted gross income (AGI) by your total contribution for this year. You have until tax day to make IRA contributions, however.

Donate to Charity

If you’re itemizing your deductions, tax-deductible charity contributions. Your donations can be in the form of money or items like used clothing, or even a used car. You can check to see if an organization is eligible to receive tax-deductible donations. Churches, temples, synagogues and other places of worship are eligible even if they are not included in the database.

Calculate Your Medical Expenses

If your medical expenses exceed 10 percent of your adjusted gross income for the year (7.5% if you or your spouse are over 65), they are tax deductible. That means you might want to consider getting a medical procedure you may have been putting off before this year ends.

Organize and Scan Your Receipts

Though there’s still a few months to go before it’s time to file your taxes, the box, drawer or file cabinet in which you keep your receipts might be unruly, even overflowing, by December. It’s smart to organize your receipts now so you can easily find them when you need them – instead of scrambling days before the tax deadline to organize them.