What better way to celebrate Financial Planning Month than to focus on your financial health by implementing some helpful tips for October and beyond.
Get a Head Start on Your Giving This Season
If there are things you or your business have in excess or aren’t using, you can turn that excess into charitable donations. Not only is your generosity going to help those who need it, but if you donate to a 501(c)(3), you can often deduct at least part of the items’ worth on your taxes.
The holiday season is just around the corner, and what better time to do a big inventory check of personal items like clothing, home furnishing, office supplies, and other equipment that many others may need in the new year.
And the Tax Cuts and Jobs Act in 2020 also raised the standard deduction for charitable giving to $12,400 for individuals and $24,800 for married couples.
Take Advantage of All the Ways You Can Reduce Income Tax
Reducing your taxable income is a great way to decrease your tax responsibilities, but many of the ways in which you can reduce it can also help set you up for financial success in the future.
Retirement accounts and plans are essential to your financial health as you transition away from the workplace. And that transition is much easier when you have spent your whole working life contributing to your retirement. 401(k), 403(b), and traditional IRA accounts all offer different avenues toward a relaxing future. So why not increase your contribution as we head into the end of the tax year 2021?
Health savings accounts (HSAs) give you a multitude of tax benefits, including tax-deductible contributions, tax-free earnings, and tax-free withdrawals.
Flexible Spending Accounts (FSAs) offer similar benefits to HSAs. Allocating some of your money here can help you two-fold: you can prepare for the inevitable health expenses while also foregoing taxes.
If you are interested in continuing your education, 529 plans are a great choice. With one, you can make contributions for approved educational expenses while also putting your tax-free earnings.
Stay on Top of New Tax Rules
Due to governmental and COVID-19-related changes, there are lots of new tax rules to take advantage of. Individuals can transfer $15,000 (and couples $30,000) to an individual each year, which you can do over multiple years and to multiple people.
The Tax Cuts and Jobs Act greatly increased the gift tax lifetime exemption (the total amount taxpayers are allowed to gift over their lifetime) in 2020 to $11.58 million per individual and $23.16 million per couple.
Keep Good Records and File Early
One of the best ways to maintain the financial health of your household or your business means keeping detailed and organized financial records and filing your taxes early to ensure that no last-minute errors are made. And one way to do that is to trust your filing to the pros. eFile360 is your affordable and accurate partner when it comes to e-filing your 1099s, 1098s, corrections and ACA forms.
Make your tax and financial planning easier for your business, sign up for a free eFile360 account today.