5 Tips For Your Tax Returns Everybody Should Know AboutAll Articles
5 Tax Season Tips For 2016 Tax Returns
Smart tax planning is knowing all the available deductions so you don’t miss out on saving tax dollars. Increase your tax returns with these tax savings tips for your 2016 tax returns.
- Maximize your employer 401(K) match. Your employer may match part of your own contributions with their employer match percentage. This is free money from your employer for 401(K) retirement. This may also put you in a lower tax bracket, when you file your taxes and you may get more money back.
- Don’t forget to make your yearly traditional IRA contribution. You can still make your 2016 contribution up to April 15, 2017. Contributing to an IRA may help you receive more tax dollars back. It also helps to build your savings for retirement.
- Take the required minimum distributions (RMD) from your retirement if you are 70-½ or older. For people who just turned 70-½ in 2016 take your first RMD before April 1, 2017. If you wait until the next year it may put you in a higher tax bracket.
- Tax-Preferred Education 529 Savings Plan- The 529 plan is a college savings account, which is exempt from taxes. This plan will help pay for high college expenses. Your state may also offer tax benefits for residents in the state. It is only for states that file income tax. Each state has different maximum dollar amount for the 529 savings plan so it’s wise to check the maximum allowance for your state. Learn more about the 529 plan with IRS’s questions and answers page.
- Coverdell Education Savings Accounts. If you qualify for the modified adjusted gross income (MAGI) the amounts deposited are tax-free until distributed. The education savings accounts have a maximum allowance for the total contributions each year. This education savings plan will help higher education expenses, elementary and secondary school expenses.
Retirement Planning For Increasing Your Tax Deductions
Retirement contributions make great tax deductions. Your retirement planning will help you save money on your tax filing. Putting money away for retirement can cut your income tax you owe. Take advantage of these retirement savings tax deductions and watch your retirement money grow. It is also a great time to start and plan your retirement or go over the retirement plans you already have. Big Financial offers tax services that will guide you through your retirement planning in North Royalton & Cleveland Ohio. Don’t wait, take advantage of these retirement savings deductions today!