Smart Year-End Tax Moves

The Saratogian (Saratoga, NY) - - BUSINESS -

As the end of the year ap­proaches, look into what smart tax moves you can make. For ex­am­ple, do­nate cash, stocks or other as­sets to char­i­ties, es­pe­cially if you plan to item­ize your de­duc­tions. Also:

• Re­view your in­vest­ment port­fo­lio’s win­ners and losers. If you’ve sold some hold­ings and have sub­stan­tial cap­i­tal gains on which you’ll be taxed, you might want to sell some un­der­wa­ter stocks for a loss to offset some or all of those gains. (Don’t buy that stock back un­til af­ter 30 days pass, though, for the loss to count.)

• Spend any funds in a Flex­i­ble Spend­ing Ac­count (FSA) on qual­i­fy­ing ex­penses, as that’s use-it-or-lo­seit money. Some em­ploy­ers may give you an ex­tra 2 1/2 months to spend it, and some may let you roll over up to $500 to the fol­low­ing year.

• Con­trib­ute to an IRA (and/or your em­ployer-spon­sored re­tire­ment plan such as a 401(k)) if you haven’t done so yet. The max­i­mum 2018 IRA con­tri­bu­tion is $5,500 (plus $1,000 if you’re 50 or older), and it’s $18,500 (plus $6,000) for 401(k)s. The ear­lier in the year you do so, the longer your con­tri­bu­tions will have to grow. (Learn more about these plans at fool.com/re­tire­ment.)

• Plan to grab any avail­able tax cred­its. If your in­come is low enough and you’re con­tribut­ing to re­tire­ment plans, you may be el­i­gi­ble for the Saver’s Credit, worth up to $1,000 for a sin­gle per­son and $2,000 for cou­ples. If you pay some­one to care for your child un­der age 13 so that you can work, you might be el­i­gi­ble for the Child and De­pen­dent Care Credit. The Child Tax Credit of­fers $2,000 per qual­i­fy­ing child un­der the age of 17. The Amer­i­can Op­por­tu­nity Tax Credit of­fers sav­ings of up to $2,500 per el­i­gi­ble stu­dent for qual­i­fied tu­ition and fees paid by or for the stu­dent, while the Life­time Learn­ing Credit of­fers up to $2,000. If you’ve re­cently adopted a child, you may be able to en­joy a credit of up to $13,840. There are many other cred­its to ex­plore.

For more in­for­ma­tion, visit irs.gov and usa.gov/taxes.

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