With the last month of the year about to begin, looking for ways to save on your taxes sounds like a good idea. There are many different ways through which we can make sure we lower our tax return payment for next April. Here we have three amazing year-end tax tips to save money this year that are quite simple and effective.
Whether you decide to make a last-minute donation to your favorite charity or giving a tax-free gift to a family member, these options are really convenient. Besides, you’ll be helping those who need it the most. Also, you will definitely make the month of someone if you decide to go for the tax-free gift. Now, if none of these options work, you might be able to talk to your employer and have them defer your bonuses until January, in case you earned any.
Donate to Charity
One of the most effective and selfless year-end tax tips that will help you save some money is to make a donation to charity. Before making a donation, you must be aware that not all organizations count as charitable. So, make sure you donate to a religious organization, a war veteran’s organization, volunteer firefighters, or any other organization that counts as charity. Keep in mind that our donation should meet a certain minimum amount in order for it to result in a charitable contribution deduction.
Make A Tax-Free Gift to A Family Member
Another great way to save money on your income tax return is by giving a tax-free gift for a family member. A gift qualifies as any transfer of money or money’s worth that is not received in return. Unlike it happens with charitable deductions, family gifts have a yearly limit amount that we mustn’t exceed. For the year of 2018, the limit amount per family member goes to $15,000 as an individual or $30,000 as a married couple. If our gifts qualify, we wouldn’t have to report it to the IRS as income, but we need to file the corresponding form to make it count.
Defer Your Performance Bonuses
If you earned a performance bonus this year, talk to your employer and see if they can defer such rewards. Receiving it in January 2019 instead of December 2018 might help you save some money on your tax return. This way, you will be able to report a lower income while still receiving your bonus next year. Keep in mind that you will still to report this as your income, but it wouldn’t be until your 2019 income tax return.