Smart Tax Moves to Make During the Summer

The summer season is not just for vacations and relaxation—it’s also an excellent time to make some strategic tax moves that can benefit you when tax season rolls around. Here are some smart steps to consider.

Review Your Withholding:

  • Ensure your withholding aligns with your tax situation. Over-withholding can mean a large refund but less cash flow during the year, while under-withholding could result in an unexpected tax bill.

Contribute to Retirement Accounts:

  • Maximize contributions to retirement accounts such as IRAs or 401(k)s. These contributions can reduce your taxable income and boost your retirement savings.

Organize Your Tax Records:

  • Summer is a great time to get your tax documents in order. Gather receipts, track deductions, and maintain a detailed record of expenses that could qualify for tax breaks.

Plan for Education Expenses:

  • Consider how to leverage tax credits for education, like the American Opportunity Tax Credit or Lifetime Learning Credit, to offset some of the costs.

Charitable Donations:

  • Making donations during the summer can be a tax-savvy move. Document these contributions to claim them as deductions on your tax return.

Conclusion:

Taking these steps during the summer can put you in a strong position when tax season comes. By planning ahead, you can reduce your tax liability and make the most of available credits and deductions.

This article was originally published by TaxAct Blog.

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