Year-end Tax Strategies To Save Money

This time of the year is a great time to take a look at tax strategies that may save you money for the current year. You should also take time to plan strategies for the upcoming year that will help you build your net worth.

Here are a few strategies worth considering:

1) Make additional contributions to your 401k – If you haven’t maxed out your

401k contributions for the year, consider making an additional contribution before the year ends. The maximum contribution for 2016 is $18,000. If you are age 50 or over you are allowed an additional $6,000 catch-up contribution (irs.gov).

2) Make a charitable contribution – If you itemize deductions, you will be allowed to count donations to qualified charitable organizations. The IRS has a webpage with information on charitable organizations. The website is https://www.irs.gov/charities-non-profits/exempt-organizations-select-check.

There are links to other pages that help you determine whether or not an organization is an exempt organizations in which chartable contributions are tax deductible. Remember that charitable contributions can also be non-cash such as clothing, household items, automobiles, stocks, land, etc. If you happen to be moving in a few months, consider donating items you no longer use to a charitable organization and receive a deduction on your tax return.

3) Consider capital losses to offset capital gains – The end of the year is a good time to take any capital losses on stocks that have lost value. You might only want to do this in order to offset any capital gains you have for the year. Speak with your financial advisor if you have any questions as to the timing of capital losses.

4) Make your January mortgage payment in December – Once again, if you itemize deductions on your tax return, you will be allowed to count any mortgage interest you pay. If you make your January mortgage payment by December 31, any interest paid will be tax deductible for you. Any additional property tax you paid will also be deductible.

5) Pay the Spring semester college tuition in December – Pay the tuition early to be allowed the deduction in the current year if you fall within the limits. Take advantage of the American Opportunity Tax Credit (AOTC). The AOTC expanded the tuition credit to more individuals. For more information, go to:

https://www.irs.gov/uac/american-opportunity-tax-credit. The annual maximum limit is $2,500.

With just a bit of planning, you can reap benefits on your tax return. Take advantage of any deductions available to lower your tax liability for the year. You can even help yourself while helping others with charitable donations. End the year financially strong and be prepared to start the New Year the same way!

Advertisements

Do You Know Your Purpose?

My husband and I were in a discussion this past weekend on why some people want to do and be the best and why others just settle for mediocrity. We talked about how some people have a fear of not trying while others have a fear of not succeeding. Both can be paralyzing if you let them.

It is interesting that I met a student last week that introduced me to a few new up and coming individuals in the motivational arena. I decided to read some of their books and I came across a great section in one book that I want to share with you.

The book was written by Grant Cardone called “Be Obsessed Or Be Average” and the section is titled Figure Out What Your Purpose Is.

Here are the majority of the questions he poses in this section:

  • What are the things I have always wanted to do?
  • What bores me?
  • What do I do that causes me to forget to eat?
  • What have I been interested in since childhood?
  • What am I willing to do for no money?
  • If money had nothing to do with my life, what would I do with my time?
  • What amount of money would I need to really make a difference for the better?
  • What can I do better than anyone?
  • What are some of my natural skills?
  • What have I always been good at?
  • What have I always been bad at?
  • What skills or talents do I have that I ignore?
  • In what areas do others think more of my abilities than I do?
  • What are the skills I need to develop?
  • What do I want to be remembered for?
  • What contributions can I make to society that I would be most proud of?
  • What do I want to make sure people never say about me?
  • Who are five successful people I admire?
  • What are those people doing that I admire?
  • What do I have in common with that list of people?
  • What makes me feel good?
  • What gives me energy?
  • What bad habits do I need to stop?
  • What good habits do I need to start?
  • If I knew I wouldn’t fail, what would I do?
  • If I could be known for one great thing, what would I want it to be?

These questions really made me stop and take a look at myself and my life. My charge to you today is to take a few minutes out of your busy schedule and seriously answer each question truthfully. Once you find out what it is that your life is about or that you want your life to be about, you will be better equipped to take the necessary steps to improve yourself to become who your are meant to be in life.

I believe you will be amazed at how much better you will feel about yourself when you find your purpose and you work to reach that purpose. Don’t let self-doubt keep you down. Overcome that doubt to be the best you can be and you will bring out the best in others!

Budgeting for Retirement

It may seem like retirement is many years out in the future. I used to think so, as well, but then I realized it really isn’t that far away and that I need to make plans for my retirement budget. You see we often put off those things we dread and retirement planning can often fall into that category.

To make things less painful, why not get a head start while time is on your side? There is no better day than today to begin considering your retirement options. Take a few minutes to sit down and make a list of how you would like to see yourself living in retirement. List any expenses you think you would have along with your income. Now this is where reality sets in. What will your income be in retirement? Have you ever really considered that question before? Be realistic and make an educated estimate as to the income. In addition, will there be other expenses you don’t currently have that you will need to consider in the budget? I am sure there will be and there are certainly expenses now you may not have in retirement such as the cost of work clothes and commuting expenses to name a few. Seriously consider all that you can think of to include in the retirement budget.

Below are a few steps to help you get started down the retirement budgeting path:

Step 1: a) Create a list of all the expenses you cannot change which we call fixed

expenses. No matter where you live in retirement you will need to

consider utilities, insurance, taxes, etc., that you will continue to pay

throughout retirement.

b) List categories for food, clothing, transportation, medication and any

other items you will need for retirement. These will differ based on your

individual circumstances.

c) Consider all the expenses you currently pay for that you feel are

necessities and decide whether or not your quality of life will change if

you do away with them in retirement.

Step 2: Consider the rising costs of certain expenses and make necessary

adjustments. For example, insurance continue to rise. Your medical costs

may be greater in your retirement years as health begins to decline.   Will

you need to add an expense for medication or increase your current

spending in that area?

Build in the cost for inflation in your retirement budget. Even though you

may currently spend $150 a month on food, the costs may increase and you

may have to spend $200 twenty years from now to purchase the same amount

of food.

Step 3: Don’t forget to include entertainment costs in the budget. I know that my

husband and I want to be able to travel and attend events in retirement

so we will include those costs in our retirement budget. We will also need to

consider additional costs of visiting our family if they move away.

Don’t let retirement take you by surprise. By paying attention to the retirement budget now and making a plan, you will be better prepared to face and enjoy those retirement years instead of worrying if you will have enough money to cover your expenses. It’s a smart move to make. Your future self will thank you.

Zig Ziglar’s Rules for Success

Zig Ziglar was a motivational speaker, author, and salesman who was born in Coffee County, Alabama. His early childhood was difficult as he father passed away leaving his mother a widow. There were 12 children in total and Zig was the 10th of those children.

Zig was known for his motivational speaking and writing. Below is a list of 10 rules for success he has mentioned throughout his career:

  1. “If you can dream it, you can achieve it.” In other words, have a dream. Give

yourself a goal to work towards achieving. “A goal properly set is halfway

reached.”

  1. Think as a champion – “Your attitude, not your aptitude, will determine your

altitude.” Keep a good attitude in everything you do.

  1. Be committed – This seems to be an issue for many people because they can’t

seem to commit to anything. “People often say motivation doesn’t last. Neither

does bathing – that’s why we recommend it daily.” Be committed everyday to give

your best in everything you do.

  1. Do it right now! Procrastination delays success. Stop making excuses and do

what it takes to reach your goal beginning today.

  1. Be prepared – Preparation is necessary for success. Arrogance keeps you from

being prepared. It shows when you are not prepared.

  1. Keep your word – “If your word is no good, you are no good.” If you don’t keep

your word, it will be difficult for others to depend on and trust you. Be a person

that keeps his/her word.

  1. Set your goals – Choose to set goals, and realize your potential. It is your choice

to make. If you choose not to set goals, the future consequences may not be what

you would want. Write the goal down, make the action plan, and put a specific

date to reach the goal. Do you know when you will reach the goal? Only after you

actually take action toward reaching the goal.

  1. Evaluate where you are – Take a look at how you are investing your time and

resources. Are you headed in the right direction?

  1. Have integrity – Display integrity on your job, at home, in your everyday life.   Be a person of integrity.
  1. Don’t quit – “Remember that failure is an event, not a person.” We will never

know how much success we might have had if we quit just short of the goal. If

you fail, get back up and try again. Don’t let defeat overtake you. Keep trying

until you succeed. Become the best you can be and don’t give up.

These are just a few of the many inspirational tips that Zig Ziglar gave over the years. It is advice that should be used as you continue striving to reach your potential!

 

http://www.zigziglarstory.com/zigs-story-part-1/

https://www.youtube.com/watch?v=t6FVCpn3ihY