Leo Leydon, giving year end tax tips and ideas for small businesses in Plymouth as well as entrepreneurs in Plymouth
Hi, I’m Leo Leydon from Financial Focus Advisory Services. You can see me at https://stocksandtaxes.com/ where I host a radio program. I’ve been a CPA for over 25 years and I’ve been doing the radio since 1999, so longer than I care to admit.
All right, let me give you a couple tax tips for employees since there’s still time. There’s still time for a few pay periods where you can take full advantage of the tax code. One area you want to look at is your withholding’s. Now, if we spend some time, we do a tax projection for you, see where we think you’re going to stand in April. If you’re going to get a significant refund, you can take that money now by reducing or even eliminating your withholding’s over the next few pay periods. If it looks like you’re going to owe, then what we can do is we can increase your tax withholding’s over the next few pay periods.
Year-end Tax Planning for Employees, Pembroke Mass
The benefit of that is withholding’s are deemed to be withheld ratably throughout the year. So if you had under withholding’s through most of the year and we catch up at year-end, the IRS presumes that they were withheld ratably throughout the whole year, avoiding any underpayment-of-tax penalty.
Another area you want to look at is your 401k. Have you made the maximum contribution if you can afford to? Or how about this: Maybe you’re getting a refund. We project your refund, so what we can do is you can have the same cash flow, but what we can do is reduce your federal withholdings and have them increase your 401k withholdings. So you’ll get a better cash – the same cash flow but better tax advantage by maxing out your 401k.
Another thing to look at is your health savings account. Now, have you contributed the max to your health savings account and other cafeteria plans, do you have some invoices that you can submit to be reimbursed, and are there other plans that you have that use it or lose it? So we still have some time. You still have a few pay periods left to take full advantage.
For more information, feel free to visit me at https://stocksandtaxes.com or feel free to give me a call at (781) 829-8626. First consultation is always free, so feel free to give me a call. Leo@stocksandtaxes.com .