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Tis the Season: End-of-Year Tax-Saving Strategies

As the year draws to a close, so does the window for strategic tax planning and benefits. The decisions you make regarding your finances before December 31st can significantly impact your tax liability and overall financial well-being for the year ahead. Here we’ll explore end-of-year tax-saving strategies you can take advantage of before the year-end deadline to improve your financial picture in the upcoming year. 

Capitalize on Retirement Contributions

We’re nearing the end of the year, but there’s still time to boost and capitalize on your retirement savings. Be sure you are contributing to retirement accounts, like a 401(k) or an IRA, as they offer immediate tax advantages while helping ensure a secure, financially healthy future. Assess your current contributions and consider optimizing them before the yearly deadline to enjoy both short-term and long-term tax benefits. For IRAs, contributions can often be made until the tax filing deadline of the next year (usually April 15th). Remember: it is important to take a look at your entire financial picture before making significant changes to your financial plan. Talk to your financial advisor to find the best course of action to continue on a path to financial security. 

Leverage Health Savings Accounts and Flexible Spending Accounts

Health-related expenses can take a toll on your finances, but utilizing Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) can offer significant tax relief. Both HSAs and FSAs allow you to save for qualified healthcare costs. Any contributions made to these accounts may be tax-deductible, helping to reduce your taxable income. Whether or not you can open an HSA is dependent on your health insurance. These typically offer higher contribution limits and allow you to carry over funds. Opening an FSA is dependent on your employer. This type of account typically has lower contribution limits and does not allow you to carry over funds, so be sure to use them before the end of the year to avoid forfeiting them. Some FSAs allow a grace period or a limited carryover, but it depends on each individual plan. It is vital to weigh your options carefully and discuss any plans with your financial advisor to ensure the best financial outcome for you. 

Optimize Investment Portfolios

End-of-year is a great time to fine-tune your investment strategy. Consider tax-efficient investment practices such as:

  • Diversifying your account types
  • Holding investments for more than one year to qualify for lower capital gains tax rates

Take this opportunity to speak with a financial professional. They can help you diversify and rebalance your portfolio for tax efficiency and long-term growth. 

Charitable Giving for a Purpose

The final months of the year are the season of giving, and your generosity can translate into tax benefits. Charitable contributions to qualified organizations offer the opportunity for tax advantages including deductions, exemptions, and estate planning benefits. Consider various giving options to optimize your end-of-year tax-saving strategies. For example, explore bundling multiple years’ worth of donations into one tax year to exceed the standard deduction. Consult your financial advisor about your philanthropic giving to optimize your financial situation while bettering the world around you. Regardless of the details, remember to gather receipts and any other necessary documents surrounding your charitable contributions to claim the deductions. 

Explore Deductions and Credits

Among the end-of-year tax-saving strategies, there is an abundance of tax credits and tax deductions that should not be overlooked. Tax credits offer a direct reduction of your tax liability. Investigate credits such as:

Thoroughly research any deductions and credits to ensure you meet the eligibility criteria. Take the necessary steps to maximize them to put more money back in your pocket. If you need help discovering which ones are available to you, speak with a financial professional. 

After addressing your current end-of-year tax-saving strategies it is important to review your financial health as a whole. Revisit your financial goals and begin adjusting for the upcoming year. Being financially proactive and making informed decisions will help to optimize your tax situation and begin the new year on solid financial ground. If you are looking to improve your overall financial outlook and secure your financial future in the new year, contact the Blakely Financial team today. 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.

Giving Tuesday: The Power of Charitable Giving

One of the greatest parts of the holiday season is giving. Giving Tuesday, a global generosity movement, takes place on the Tuesday after Thanksgiving each year.

What is Giving Tuesday?

Giving Tuesday began in 2012 as a simple idea: a day dedicated to encouraging people to do good. Since then it has grown into a movement meant to unleash the power of people and organizations to transform their communities and the world at large. It demonstrates the power of philanthropy and collective action, inspiring hundreds of millions of people a year to give, collaborate, and overall celebrate generosity. 

How to Get Involved

Everyone can participate in Giving Tuesday and there are various ways to contribute. The first step to getting involved is choosing a cause that resonates with you and your values. Research the organization of your choice to ensure your contributions go somewhere reputable. After choosing your cause, there are many ways to give. Monetary donations are a common method, but you may also consider donating your time, skills, or other goods when appropriate. You can also participate in local fundraisers, community drives, or events.

Charitable giving is not limited to individuals – it can be embraced by businesses and organizations as well. Ask your employer about a matching program for employee donations, a team volunteer day, donating a portion of sales, or even donating products. Engaging in those activities will boost your organization’s corporate social responsibility while creating a significant positive impact on your community. 

The Impact of Charitable Giving

Charitable giving is vital in addressing various societal issues such as poverty, hunger, education, health, and environmental conservation. There are a number of nonprofits and charitable organizations that do essential work for these causes, making tangible differences in the lives of those who need it most. Many of these organizations rely on the support of donors and volunteers to serve their respective communities. Donated dollars, goods, and time, contribute to providing meals to those who need them, educational opportunities to underserved communities, preserving natural habitats, and much more making the impact of philanthropy undeniable. 

The Joy of Giving and Its Rewards

One of the most amazing aspects of giving is that it does not only benefit the recipients – it benefits the givers, too! Giving to others can be personally rewarding, leading to increased happiness and reduced stress. While you’re making the world a better place you’re also enhancing your overall wellbeing. In order to qualify for tax deductions, donations must be made to qualified organizations from the IRS guidelines.

In addition to emotional benefits, philanthropic giving also offers tax benefits including deductions, exemptions, and estate planning benefits. By working with your financial advisor, you can maximize these benefits while aligning your philanthropic goals and financial objectives.

Giving Beyond Giving Tuesday

Giving can be a year-round endeavor! While Giving Tuesday is a great way to get started, it is not the only opportunity to give. Talk to your financial advisor about building charitable giving into your long-term financial plan. Determine a fixed amount or a percentage of your income or assets you would like to allocate to philanthropy. Explore various philanthropic vehicles to maximize the impact of your donations. As a high earner, you have the unique opportunity to make a meaningful and lasting impact on the world through philanthropy. Start building your philanthropic legacy today!

Ready to begin building your charitable giving into your financial plans? Contact Blakely Financial today to get started. 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.