This article originally appeared in the November 2015 issue of 425 Business.
It’s about that time of year. The leaves are falling from the trees, recipes for pumpkin pie and tips for roasting turkeys are flying through the Internet, and people are preparing their lists for Santa (and his reindeer). Holidays are on the brain, but don’t let the tax season sneak up on you. We caught up with Julia Proudlove, a partner at Hersman Serles Almond in Bellevue, to find out what we should be doing right now to get the best tax refund possible. Heed these words, lest the ghost of tax seasons past comes a-haunting.
Maximizing is the best way to minimize.
Here’s the thing: Contributing the maximum allowable amount to your retirement plan and health savings account will decrease your taxable income and help trim your tax liability. Contributing to your retirement plan is even more important if your employer has a matching program, which is essentially free money from your employer for adding to your retirement account. Health savings accounts enable you to store up money to pay medical bills with pre-tax dollars that would not normally be deductible because of IRS limitations.
Organization is the key to taxes. By keeping excellent records, you will have the documents ready to take advantage of several previously unused deductions based on the year’s activity when meeting with a tax professional. There are many deductions you might be eligible to claim:
- Unreimbursed business travel expenses
- Continuing-education classes, medical premiums, and expenses
- Regional Transit Authority tax on your vehicles
- Charitable miles
- A home office
Do not assume.
Whether buying or selling property, capital equipment, or stocks, assuming that now is the best time to do this might not be the best idea from a tax-planning standpoint. It’s important to take the necessary steps to figure out if there are tax advantages to performing these transactions in one year over the next. A gentle reminder: The maximum capital loss deduction is $3,000; do not sell stock at a loss in excess of $3,000 unless you have capital gains to offset it.