Ways to Lower Your Tax Bill Now
By Saghir Aslam
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live with dignity and fulfill their moral obligations towards charitable activities)
APPRECIATED REAL ESTATE
One of the best ways to get blessing from almighty God at the same time reduce your taxes considerably is to donate your appreciated real estate. We all know property price sky rocketed all over America and more so in California. So here you can kill two birds with one stone. Your real estate portfolio and se what is the best for you to take advantage of.
TRIED AND TRUE METHODS FOR
KEEPING MORE MONEY FOR YOOURSELF.
Many people don`t think about their taxes until springtime, but putting that off could mean you`ll owe more.
If you want to try to lower your tax bill , the important date isn`t in April – it`s now Tax pros say you still can make a few fore the calendar seals the fate of your 2017 return.
Make a Donation
Last-minute charitable contribution can be tax-deductible –even if you
Make them on a credit card. The date you pay off the card balance isn`t factor. Beware that donation can take time to process.
“The day after Christmas is pretty much your last day to deal with charitable contributions, even on the credit card.”
“You want to make sure it hits the current statement.”
Offset capital gains
If you`ll have capital gains to reckon with, consider selling off some underperformers in your portfolio, The IRS lets investors use some capital losses to offset taxable capital gains, which means, for example, a $4,000 loss you take on a stock by Dec 31 might effectively
Cancel our $4,000 in capital gains during the year.
Donation appreciated assets such as stocks to charity also could help avert capital gains tax, Giving away $1,000 worth of stock that you
Bought for $100 could garner a $1,000 donation write-off, for instance, and save you from paying capital gains tax on the $900 profit you would have made from its sale.
Get out of the office
End-of-year business travel and even working from home could lower your bill if you work in a city with a wage tax, Bender for example, has a tax up to 3.9 percent on wages, commissions and other compensation earned inside the city limits. Nonresidents pay the tax only when they are working inside the city limits.
“If you live in the burbs but you work in Philly, if you have a calendar that says you worked remotely, (and) it`s a significant enough number of days, we can get Philadelphia tax refunds for the days that th3ey withheld city wages tax but you weren`t in the city, payroll departments often incorrectly withhold the tax on days employees work remotely, so it`s worth checking your city`s rules and your W-2.
Track the days you worked outside the office. Many people don`t do it “but they do when they realize that it`s worth 4 percent “ of what they made that day.
Stoke your savings
If you haven`t already, consider maxing out the contribution limit on a traditional IRA it`s $5,500 if you`re under 50 and $6,500 if you`re older) if you`re eligible to deduct all or part of your contribution. Whether you can deduct those contributions is a function of income and other factors.
And here1s some other good news: You can make contributions to an IRA for the prior year until the current year`s tax filing deadline. That means IRA contributions for 2016 be made up to the April 2017 filing deadline.
Contributing to a 529 plan for college savings could be another last-minute option. There`s no federal tax deduction for those contributions, but you might qualify for a state tax deduction. Check the rules, though – contributions may only be deductible if they`re going into a plan run by the state you live in.
Retirees who split their time between homes in different states may be able to cut their tax bills by spending the last few days or weeks taxes. The rules can be complex, but living in a particular state for more than half the year often dictates whether that state can tax certain types of income.
“We hear these horror stories from people where if they would have spent another week in Florida they wouldn`t have to pay New York City taxes, “And if the clients had known that, they would have been happy to do that. They had no idea.”
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)