Save Money and Reduce Your IRS Bill in Portland With Simple Year-End Tax Planning Tips

Metro Area - Portland - Vancouver - Hillsboro

You can save money and reduce your IRS bill if you are living in Portland, Vancouver or Hillsboro. With a few simple tax planning strategies you can lower your year-end tax liability. All these strategies are legal and legitimate. Reducing the tax payable will not only save you at present but will also avoid the probable future tax problems with the IRS.

1. Accelerate your deductions in the present year

It is good to club your deductible expenses into the present year together. If you get deductions in the present year, you can reduce the amount of tax you have to pay. Even though you're not practically paying a particular fee in the next year, you can still make the deductions this year by making a payment for current year. Mortgage is a good example.

2. Defer income into the next year

When you defer your income till the next year, you do not have to pay the tax on it this year. For self-employed or an independent contractors, it is possible to complete the work in the present year, but can get the payment next year. Do not send out your invoices till the end of the year. This is perfectly legitimate. You don't have to pay taxes on income that you haven't received in the present financial year.

3. File your return on time

It is very important to file your return on time. Even if you do not have the money to pay the complete tax, it is important that you file your return. This will save you 25% on the failure to file penalty. Filing an extension will not help here because it only extends the time to file and does not extend the time to pay.

4. Accelerate your medical expenses

You can deduct medical expenses but it has got a restriction. You can deduct only the amount by which your medical care expenses for the year exceed 7.5% of your adjusted gross income. So get your medical procedures done at the end of the year. It is possible to take full deduction of the cost in the year it happens.

5. Pay an extra month's worth of the mortgage

You can pay your January mortgage payment in December. In that case, you'll be able to get the deductions for that amount.

6. Pay your property taxes early

You can pay your property taxes by the year-end for the next year, as it is deductable.

7. Maximize annual contributions to retirement plan accounts

Your annual contributions to the retirement plan accounts are deductible.

Get expert tax help today by calling Mike Habib, EA at 1-877-788-2937

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