3 Tax Moves to Close Out 2021

December 31st will be here soon! It is not too late to make tax-savvy moves before year end. Here are some tips when wrapping up your finances for 2021:

1. Financial checkup: Doing a financial checkup before year-end, or really anytime throughout the year, can help you to pay the right amount of taxes as you go. The IRS has a handy tool to help taxpayers check their federal income tax withholding. Tax strategies can be complicated, so you should consult with a tax advisor and financial professional.
2. Tax savings: Look at reducing your taxes by increasing your workplace retirement plans such as your 401(k). If you are working from home as self-employed, make sure you are tracking your expenses and office space to include in your home office deduction. Further, now is the time to get a handle on any investment gains and losses to do something about it before December 31st. You don't want to wait until you file in April to figure out your realized gains because then it would be too late to offset with losses.
3. Savings: Consider putting extra money contributed to a Roth IRA or section 529 college savings plan. These options are tax-free. Charitable giving is another option to minimize capital gains tax. 

The end of the year is a good time to check on your financial accounts. It can make sense to do some year-end housekeeping, including evaluating tax strategies and making plans for the coming year. Need help? Contact Traditions Wealth Advisors at [email protected] or 979-694-9100.