In 2018, four out of five Americans will see a tax deduction, according to the Atlantic. But, that’s no reason to file blindly. Here are some things to consider when filing your taxes.
It’s always a good idea to contribute as much as you can towards your retirement. Contributions to retirement accounts are tax-favored, including 401(k), Roth Individual Retirement Accounts (IRA), traditional IRAs, as well as others.
Health Savings and Flexible Spending Accounts
Contributions to Health Savings Accounts and Flexible Spending Accounts are made from pre-tax funds. If you pay for regular prescriptions or have predictable health costs of some kind, put that money in your HSA at the start of the year and take it out when you need it. An HSA will also grow and roll-over from year to year.
Leverage Your New Family
If you are newly married or have a new baby, you may not have thought about the tax benefits of filing jointly or claiming a child tax benefit. Consult with a trusted tax advisor to decide whether these benefits are something you will want your new family to take advantage of.
Track Your Charitable Gifts
Often when we donate to charity, we forget to itemize and document our donations, leaving a pile of cash on the table. Remember that clothing, furniture, and cars can all count as tax-deductible donations.
For gifts under $250 dollars, simply document the gift. For those over $250, make sure you get a receipt from the charity, and be sure that your donation does qualify as tax-deductible. Not all charities can receive tax-deductible donations, according to the IRS charity search website.
If you make donations throughout the year, it can add up to more than the standard deduction, in which case you can deduct even more from your tax bill.
Hire a Professional
Chances are, you don’t have time to keep up with the changes in tax law. Especially as the new tax bill comes into effect this year, many things will be changing. That’s a good reason to opt for a professional who can help you find the tax breaks you qualify for, and who can help you plan to qualify for more in the future. BECU members can get a $20 discount on filing taxes with Turbo Tax through BECU and Turbo Tax advisors are available to answer your tax questions.