Blog

7 Last-Minute Tax Saving Tips

Posted by Jenny Shilling on Tue, Dec 29, 2015 @ 08:12 AM

The yeyearend2015.jpgar is quickly drawing to a close, but there’s still time to take steps to reduce your 2015 tax liability — you just must act by December 31:

  1. Pay your 2015 property tax bill that’s due in early 2016.
  2. Make your January 1 mortgage payment.
  3. Incur deductible medical expenses (if your deductible medical expenses for the year already exceed the applicable floor).
  4. Pay tuition for academic periods that will begin in January, February or March of 2016 (if it will make you eligible for a tax credit).
  5. Donate to your favorite charities.
  6. Sell investments at a loss to offset capital gains you’ve recognized this year.
  7. Ask your employer if your bonus can be deferred until January.

Keep in mind, however, that in certain situations these strategies might not make sense. For example, if you’ll be subject to the alternative minimum tax this year or be in a higher tax bracket next year, taking some of these steps could have undesirable results.

If you’re unsure whether these steps are right for you, consult us before taking action.

0 Comments Click here to read/write comments

Topics: savings, taxes

The 529 Savings Plan: a Tax-smart Way to Fund College Expenses

Posted by Jenny Shilling on Tue, Nov 24, 2015 @ 09:11 AM

Section 529 Savings PlanIf you’re saving for college, consider a Section 529 plan. Although contributions aren’t deductible for federal purposes, plan assets can grow tax-deferred. (Some states do offer tax incentives for contributing.)

Distributions used to pay qualified expenses (such as tuition, mandatory fees, books, equipment, supplies and, generally, room and board) are income-tax-free for federal purposes and typically for state purposes as well, thus making the tax deferral a permanent savings.

529 plans offer other benefits as well:

  • They usually offer high contribution limits, and there are no income limits for contributing.
  • There’s generally no beneficiary age limit for contributions or distributions.
  • You can control the account, even after the child is of legal age.
  • You can make tax-free rollovers to another qualifying family member.

Finally, 529 plans provide estate planning benefits: A special break for 529 plans allows you to front-load five years’ worth of annual gift tax exclusions and make up to a $70,000 contribution (or $140,000 if you split the gift with your spouse).

The biggest downside may be that your investment options — and when you can change them — are limited. Please contact us for more information on 529 plans and other tax-smart strategies for funding education expenses.

Click to edit your new post...

0 Comments Click here to read/write comments

Topics: savings, college, 529 plans

Preparing for College - Money Saving Tips for the College Bound

Posted by Jenny Shilling on Tue, Jul 8, 2014 @ 07:07 AM

Manage Your Money Ahead of Time

college planning money managementAuthor: Jenny Shilling

While it's still only July, it's never too early to be prepared.  School will be starting faster than you think.  August is right around the corner; are all your ducks in a row?  The costs involved with your college education are not going to go down at all. They are simply going to increase steadily as your time spent at the institution progresses. Do you have a plan in place to cover the increase in costs? While you are spending your time studying, there isn't much left over for bringing in the cash.  What this usually means for students is DEBT, and lots of it.  However, with some money management tips, you may be able to save thousands of dollars over the course of your university experience—dollars you won’t be paying interest on when you’re 35.

  1. Submit a FAFSA. A Federal Application for Student Aid (FAFSA) provides access to Pell Grants and subsidized student loans that can make college affordable for almost anyone. Be sure to mark the box indicating that your parents are not giving you assistance for college - if they are not assisting you.

    If you are working a part time job, you can generally qualify for $5,500 a year in Pell Grants, along with $10,000 in yearly subsidized, low-interest student loans—loans that don’t even start accruing interest until you graduate.
  2. Community Colleges: If you are planning on graduating from a 4 year university, it is in your best interest to begin your studies at a local community college. You will be able to take your general education classes for less cost there, and then transfer to your "choice" school with only the upper division classes required for graduation.  Graduating from a community college will award you an Associates Degree. Depending on your high-school grades, beginning at the community college can even better your chance at attending your 4 year university.
  3. Invest in a Tablet: With the convenience of a tablet / iPad, the cost of your textbooks can be greatly reduced.  Using an e-reader program, Kindle, etc., you will have the ability to download your textbooks for a fraction of the cost.  In fact, some teachers now require you to download the text rather than use a regular textbook.
  4. Internships: To participate in an internship, you have to be enrolled in school. Doesn't matter which school exactly. While it looks better to the business you're applying to for the internship to be at the 4 year university, you could take classes over the summer at a less expensive school. Be aware, that there have been recent changes in the laws regarding internships.
While these are just some of the things you can do to save money during your time at college, there are many others as well.  If you would like to speak to a professional regarding money management or programs for education savings, the professionals at The Tax Office, Inc., would be happy to answer your questions.

 

 

 

0 Comments Click here to read/write comments

Topics: education, Jenny Shilling, savings

All posts