Post-Year-End Tax Minimization Strategies & Tips | Two Roads

Post-Year-End Tax Minimization Strategies & Tips

January. It’s the time when tax return factories suddenly begin advertising and competing for your attention with catchphrases about tax refunds and big deductions. It's also the time more of us are on the hunt for tax minimization strategies than ever!

Based on the amount of time you thought about your taxes last year, it feels like they only matter when April is looming. Various online articles post something about last-minute tax-saving tips and tax minimization strategies and how to make it through April 15 paying only what you absolutely owe.

And suddenly, you’re left scavenging for receipts for that bag of clothes donated in March.

The best tax-saving tip that I can give you today is this: Start planning for your 2022 taxes right now. Find a CPA and bookkeepers (like us) and have an open conversation about your upcoming plans and ask them how you can achieve those goals with as little tax consequence as possible.

(Don't miss these other tax decrease strategies for business owners next)

Tax Minimization Strategies

Now, on to those last-minute tax tips that can still save you a little bit of money in April:

  1. Do you want to give to charity but are tight on cash? Consider giving stock instead. Actually, consider giving stock even if you have the cash. This could help you give more while paying less, depending on the circumstances. Keep in touch with them throughout the year to stay updated and ensure your plans work for your benefit. This is much more effective at reducing your tax liability than chasing down receipts in January.
  2. Sit down with a CPA, and talk about everything that happened in 2021 (donations, medical bills, taxes, unreimbursed business expenses, business loans, etc.). This conversation and gathering all necessary records will help ensure that no deductions are left unreported.
  3. Some contributions to retirement plans can be deducted, even if they weren’t made until after December 31, 2021. Including contributions to deductible IRAs made by April 15, 2022. Like many tax deductions, there are complex rules surrounding this kind of contribution, so be sure to get professional advice before contributing.

Make sure that you’re paying your estimated taxes on time. The IRS requires your taxes to be paid quarterly. If you’re late, they will charge you interest and penalties. Since the interest accrues daily, it’s never too late to make a payment.

(You won't want to miss these record-keeping habits to help you maximize your tax deductions next)

2022 and Beyond

Now let’s focus on this year. Whether you want to grow or sell a business, donate to charity, sell stocks, give a gift to your kids or just invest in your retirement, it’s better to think about the tax consequences of those plans sooner than later.

So, put these tax minimization strategies to work for you today, but keep up with them over the year and for years to come!

(2022 is also a great time to ensure you're protecting yourself from credit card fraud. Visit this post to learn how to do just that)

Ready to talk more about these and other financial considerations? We're here to help.

Click here to set up a call with the Two Roads team today.

Did you learn a lot from these year-end tax tips? Here are three more posts to read next:

This post was first published in 2015, but it was updated in 2022 just for you.