Ways to reduce your tax bill before the new year
MADISON, Wis. — With the year winding down, financial experts say there is still time to cut down your upcoming tax bill in the new year.
The first thing to do: check the withholdings on your paychecks. If your withholding isn’t right, you may be paying more in taxes than you should be — or not enough, which could lead to an unpleasant surprise when you file your taxes in April.
You can also boost retirement plan contributions, which will cut down on taxable income before the end of the year.
Madison College professor Dan O’Brien says you can also double up on your deductions.
“Most people can’t itemize, or if they can, they can’t do it every year. So you double up in deductions in one year, and then the next year you take a standard deduction, and that will minimize your taxes over the two-year period,” said O’Brien.
Charitable donations can also help reduce your tax bill. While law changes in recent ears have reduced the incentives, experts say it can still help you maximize savings if you’re in the right situation to give.
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