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Year-End Planning: Getting Your Financial Ducks in a Row

November 4, 2021

Start your 2022 off right with the right financial planning.

Beautiful stylish fashion clothing items hanging on a rack

The end of the year is a time when we reflect on what we have accomplished and plan for the future. In this article, we will provide you with a comprehensive guide for tax planning and preparation. 

In this article, we’ll explore how to plan for taxes in 2021 from an individual perspective. We’ll also cover some steps to take now so that your taxes are as low as possible before the first day of January rolls around.

What are the Most Important Things to Keep in Mind Before December 31st?

The year is coming to an end, and there are so many things that need to be taken care of before December 31st. One thing you can do is set yourself up for success in 2022 by ensuring that you have all the right tools at your disposal. For example, if you want to start a new business or plan for retirement or manage your personal finances, you should consider getting help from a professional advisor who has the necessary expertise and experience in these areas.

If you’re not sure how to find one, just ask your current banker for referrals – they’ll be glad to help!

Tax Strategies for Individuals in Different Situations

Tax strategies play a significant role in determining the outcome of your tax. At times, it can determine the final taxation as well. From an individual perspective, there are different situations that need to be considered before approaching any tax strategy.

Early planning can be a powerful tool to reduce your tax burden. From an individual perspective, there are different situations that can determine the outcome of your tax, both positively and negatively. For example, you might have a significant income but be in a low-tax bracket. In this case, you would want to find ways to reduce your taxable income so that you are paying taxes on less money.

How to Save Money on Taxes with These 5 Simple Strategies

For more information on any of these strategies, click the links below:

Strategy 1: Maximize Your Deductions

Deductions are expenses that are not considered taxable income. These expenses can include student loan interest, moving costs, gifts to charity, medical expenses and more.

Strategy 2: Make a Charitable Donation

Charitable donations can be a great way to give back to the community. In the past, many people have donated in order to receive a tax deduction or because they want to work towards a specific goal. However, there are other reasons why you may want to consider donating.

Strategy 3: Max Out Your Retirement Contributions

The average American spends $1,700 per year on clothes and $2,000 on entertainment. That’s about 8% of their annual income! Instead of spending that money on things that don’t last, why not put it towards your future? If you’re not maxing out your retirement contributions now, there’s no time like the present to start.

Strategy 4: Donate to a College Saving Plan

Giving to your college savings plan is a great way to save for your child’s future. This money will grow over time and ensure their educational needs are met. Giving even just $25 a month can help grow your account.

Strategy 5: Consider a Roth IRA

The Roth IRA was established in 1997. Contributions are not tax-deductible, but qualified withdrawals from a Roth IRA are not subject to federal income tax. The contributions may be withdrawn at any time without penalty or taxes.

Which Personal Expenses Are Deductible on Your Tax Return?

This article will be helpful to you if you are wondering whether or not your expenses are deductible.

Personal expenses that are deductible on your tax return include the following:

– Medical and dental expenses, including health insurance premiums.

– Mortgage interest paid (subject to certain limitations).

– State and local income taxes (or sales taxes in lieu of state income taxes) paid.

– Casualty losses (subject to certain limitations).

– Charitable contributions made.

– The cost of maintaining your home, including the cost of food eaten there.

Some other personal deductions that may be available for you include unreimbursed employee business expenses, moving expenses, and alimony payments made.

Take the time to plan ahead for your taxes and you’ll have a much easier tax season.