Expert Says Don't Wait Until Tax Season, Use These 5 Tips To Save Money
NEW YORK (CBSNewYork) -- How would you like to reduce your tax burden?
CBS2 has five tax tips that you might want to consider acting on before this year ends.
An expert told reporter Dave Carlin on Wednesday that there are some things you can do to save money if you act before Dec. 31.
Keeping close track of her family budget and maximizing ways to save at tax time are enjoyable tasks for Midtown resident Isabel Reyes.
"I do do my research," she said.
But some others don't give their taxes much thought, until filing time.
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"There are tons of things you could do in the next few days to save yourself money on your '21 taxes," said CPA Anil Melwani.
Melwani is partner at Tanton Grubman. He gave CBS2 five end-of-year tax tips, so you'll need to act fast.
First, Give to charity.
Carlin found Arlene Kohler of Kips Bay at Housing Works, donating items and getting dated receipts.
"I jot down everything that I am donating and so when I fill out the form at home I know exactly what I donated," Kohler said.
"If you're donating to charity any time soon you might as well do it in the next three days," Melwani said. "As long as you get them out the door and get the receipt dated this year."
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Melwani's next tip is find ways to defer income.
"People are instructed that it would be a good idea to defer income. Can you explain how that works?" Carlin asked.
"You can always ask your employer to defer bonus payments or extra compensation you were going to get at year end and commissions and things like that and you can ask him to do it. Sometimes they will," Melwani said.
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He said parents may want to fund a 529 Education Savings Account.
"It's a college savings plan and any money you put into it, certain states give you a deduction, like New York gives you a deduction for contributions to it," Melwani said.
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Melwani also said an option is to sell losing stocks.
"Take a look at their stock portfolio and see what they can do that in the next three days. Is that right?" Carlin asked.
"Think about selling them because if you're down on a stock and you sell it now, you can take the loss in '21. You just have to wait 30 days to buy it back," Melwani said.
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And finally, sign up for classes for continuing education, and legitimate business purposes.
"Any of those classes you want to purchase, purchase it now. As long as you pay for it this year, you usually can expense it this year," Melwani said.
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And one final thought from our expert is next time, don't wait until last week of the year to do some of these things.
"See where you are at a few points throughout the year so you can plan ahead, Melwani said.
He said tax savings are there. You have to find and act on them before it's too late.
CBS2's expert said for many people it is wise to file your taxes as early in the new year as you can, which helps the Internal Revenue Service process your return more quickly.