A lot of discussion lately has gone toward year-end tax returns. It is a stressful time for you and can become quite overwhelming, especially when considering expense claims you likely have to make. It’s possible that as a result of business-based expenses, you have extra income or may need to deduct expenses. Below are some pointers for filing your 2017 year-end returns.
Defer Your Income
There are particular situations where your employer has reimbursed you, and you may need to report this reimbursement as income. Income is taxed the year it is received, but it sometimes possible to make “today” become “tomorrow.” This is especially achievable if you are self-employed or perform freelance work, as you can delay billings until the following year.
Deductions allow you to lower your tax bill for this year. You must have a receipt for the contribution, but they allow flexibility because you control the timing. If you can itemize rather than claim the standard deduction, this could be extremely beneficial. If your qualifying expense claims exceed the standard deduction of $6,300 if you are single or $12,600 if you are married filing jointly, then you should look to itemize your deductions.
Contribute To Your Retirement Account
Although it doesn’t directly involve business expense claims, you may have a retirement fund such as a 401(k) or an IRA. If you can, try to increase your 401(k) contribution so that you are putting in the maximum amount allowed, especially if your employer matches the contribution.
Monitor Your IRA’s
Making deductible contributions to your IRA can reduce your taxable income for the year. If you are making withdrawals from your IRA, consider withholding tax from the payment. Withholding is voluntary to any amount that you set, and can help avoid unnecessary hassle.