With ongoing discussions of tax reform and tax changes since 2016, Jackson Hewitt Tax Service wants to help taxpayers keep more money in their pockets with eight year-end tax tips.
Here are some tips from Jackson Hewitt that taxpayers should consider while time is still on their side for 2017 taxes:
• Homeowners Haven – You can deduct the mortgage interest on your first and second home that you pay on loans, home equity lines of credit and on construction loans. Did you buy that boat or RV last year? You may be able to deduct the interest on your tax return. And don’t forget your real estate taxes and maybe even sales taxes — these may also be deductible.
• Be Generous – Declutter and reap a tax break! Donate your gently used, unwanted items (in good condition) to a qualified charitable organization. Remember, only contributions to IRS-approved charities are deductible. Also, be sure to retain receipts for any donated items you’ve purchased, like food or gifts.
• Hunt & Gather – Time to start digging through those piles; you’ve got documents to pull together that are needed to file your annual tax return and more coming in the next weeks. Stay organized by separating paperwork into four simple categories: income items, deductions, life changes, and other. If you have self-employment activity or experienced other significant life challenging events, such as taking care of parents or losing a job, you probably can use a couple of more categories. You’ll appreciate having all that you need at your fingertips when it’s time to meet with your tax pro.
• Reduce Taxable Income – Even if you contribute regularly to your traditional 401(k), or a similar workplace retirement plan, consider contributing up to the max before December 31 to reduce your taxable income for the year. For those with an IRA, keep in mind that you have until April 17, 2018 to make 2017 IRA contributions. If you are age 70 ½ or older and you have a traditional IRA or conventional pension plan, be sure you have taken your annual required distribution to avoid penalty.
• Scholarly Contributions – Review your upcoming education expenses; consider maximizing your tax return education credits by prepaying college tuition bills that are due in early 2018. This can result in a bigger credit on this year’s Form 1040, as you can claim a 2017 credit for prepaying tuition for academic periods that begin in January through March of next year. Talk to a tax pro if you have any questions.