Make your 2024 New Year’s resolution a great one! It’s time to line up your long-term financial goals with an effective tax-savings strategy – now that’s a resolution! As you pull together documentation for filing your tax return, let’s look at a few strategies you can implement to potentially reduce your stress and future tax obligations.
Embrace the Time for Preparation
Evaluating your finances well in advance of tax season will help you better prepare for Tax Day. The key is to start early, especially if you’ve had a major life change like a new home or job. It’s also a good idea to plan if you think you’ll owe taxes or if you qualify for certain tax deductions.
Did you know you can make tax-prep changes to your paycheck leading up to tax season? Periodic assessments of your paycheck withholdings could set up a refund or even a reduction or elimination of your future tax burden come April.
Turn Investment Losses into Gains
The New Year is a great time to review your financial portfolio with your Wealth Advisor. A Wealth Advisor will be your guide to evaluating assets that have performed well and assets that have incurred losses. This review can help ensure you are maximizing your investment savings and help estimate your gains and losses.
For example, you might consider avoiding short-term gains since these are taxed at higher rates. If you are anticipating a short-term gain, offset them with short-term losses or consider holding onto the assets for at least one year (when they become long-term assets).
Nothing sets you up more for success than knowing your documents are ready to go. Keep track of your tax and other financial records to avoid delays or frantic preparations as the filing deadline approaches. This includes W-2 forms, canceled checks, certain receipts, and previous years’ returns.
Some other helpful items to start gathering include your pay stubs, mortgage payment records, records on charitable giving or donations, medical bills, and credit card and bank statements to verify deductions. Find a place to store your tax documents until it’s time to prepare to file – early planning may alleviate concerns later as the tax deadline gets closer.
Always Look Forward
Proactively planning your financial strategy with your wealth advisor can help you take advantage of the tax opportunities available and keep you from breaking a sweat once tax season arrives.
By Robert Savage
Robert joined OneAZ Wealth Management in 2023 and focuses on detailed wealth management strategies for clients at all life stages. He takes the time to get to know each client and create actionable steps in addressing their financial goals. In 2021, he completed the rigorous curriculum to earn the respected Retirement Income Certified Professional (RICP®) designation from the American College of Financial Planning. Mr. Savage holds his Arizona Life and Health Insurance License and is registered with LPL Financial with his SIE, Series 7, and Series 66 securities registrations.
OneAZ Wealth Management is a team of LPL Financial licensed professionals and support staff located in OneAZ Credit Union branches across Arizona. OneAZ Wealth Management provides investments, insurance, and retirement planning services intended to guide credit union members towards their financial goals. To learn more about OneAZ Wealth Management, visit OneAZWealth.com or call (877) 566-0517.
Tax services are not offered by OneAZ Wealth Management, OneAZ Credit Union, LPL Financial or affiliated advisors. We suggest that you discuss your specific situation with a qualified tax advisor.
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