If you dread doing your taxes, you are not alone. Compiling all of the different pieces of information you need to establish your income, expenses and deductions is a hassle regardless of whether you are a single individual or a small business owner!
While it’s tempting to put off your tax filing for as long as possible, a little bit of advanced preparation can go a long way. By taking some time to get things in order at the end of the year, you can avoid a major headache when your tax deadline gets closer.
- Consider mutual funds: If you have an actively-managed mutual fund, it’s important to consider your year-end distributions. Check your estimated end-of-year distributions so you can determine whether there will be a significant impact on your taxes. When mutual funds that you are invested in make large distributions, you may be stuck with a pretty significant increase in your taxes. If you’re thinking about buying into a mutual fund, wait until after it makes its year-end distribution so you can avoid additional taxes.
- Get rid of underperforming stocks: If some of the investments in your portfolio are underperforming, the end of the year is a great time to get rid of them. The practice of selling securities that are on the decline is known as tax-loss harvesting and it allows you to offset your tax liability by capitalizing on a loss.
- Contribute to your 401(k): If you haven’t met your maximum 401(k) contribution for the year, try to fund your account fully before the end of the year. Contributing to retirement accounts as much as possible is the best way to ensure your long-term financial health while maximizing short-term tax benefits.
- Take your RMD: If you have an IRA, you need to take your required minimum distribution before the end of the year. If you fail to take your RMD, you may be stuck with a pretty major penalty. You are required to take your first RMD in the year when you turn 75 and a half and you must take the withdrawals by December 31st.
- Work with a professional: There are so many different things to consider when it comes to taxes that it can be difficult to keep up with everything. You will likely benefit from professional tax preparation in Des Moines, IA. A professional tax agent can walk you through all of the various factors that apply to your specific situation.
Get Tax Assistance in Des Moines, IA
At Accounting & Tax Professionals, PLC, we understand that taxes can be frustrating. That’s why our team is here to provide you with professional tax help in Des Moines, IA. Since 1997, our locally owned and operated business has been providing individuals and businesses with comprehensive tax preparation and payroll services. Our tax agents will work with you to ensure every aspect of your tax filing is completed with a high level of accuracy. To find out more about the full list of services we offer, give us a call today.