Stretch Your Dollar: Expert advice on tax planning season before the new year

Stretch Your Dollar

(WTNH) – With tax-filing season just a few months away, it’s time to make your to-do list and check it twice. H&R Block’s Kathy Pickering has some expert advice on tax planning before we ring in the new year.

To start, you can make last-minute contributions to your retirement savings accounts, such as your 401K or IRA.

“So, not only are you getting the benefit of saving for retirement, but you’re also getting the benefit of reducing your taxes,” Pickering said.

If you have money remaining in a flexible savings account, Pickering says to use those funds because they are use it or lose it.

There’s still time to make tax-deductible donations to your favorite charities.

“Which is so important right now as everybody is coming through the pandemic and looking to help one another recover,” Pickering said.

A special tax break in effect this year means individual taxpayers can deduct up to $300 for charitable donations. Married couples who file joint returns can deduct up to $600, but remember to keep your receipts.

“And that’s in case the IRS comes back and asks you about it,” Pickering said.

Look into 2021 tax law changes that affect you, such as the child tax credit, health insurance premiums, and required minimum distributions from retirement accounts. Lastly, start gathering all of your tax documents. Pickering suggests filing sooner rather than later.

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