By Marc S Schliefer, CFP®️RICP®️
Wealth Advisor and CEO
Now that we are into springtime, it’s a good time to do some planning with your finances. If you are like a lot of people, you will have done your 2021 taxes already and are saying to yourself (and others) that you wish you had planned better to save on taxes because you feel you paid too much. The best strategy is to spend time with your tax and financial advisors and see what could’ve been done to pay less, and what can be done this year to make sure that you are not in the same position again next spring.
One of the things that is associated with the spring, of course, is spring cleaning. It’s a good time to go through your home and look at the clutter and decide what to do with it. You have several options. Throw things away that have no resale or donation value. Donate items that you no longer want or need to charity and receive a tax deduction for your 2022 taxes. You may also want to look at consignment shops for your more valuable items if you do not have the time or desire to sell them yourself or do not wish to donate them. There are also eBay and other sites where you can list items for sale and make some extra money. Just be sure that you include the shipping costs before you finalize any sale. Shipping cost are and will continue to increase and you don’t want to shortchange yourself with that expense. Donating or selling items is a good way to keep your house free of clutter and a good way to make some extra cash. It’s also a way to save on taxes at the same time.
Another thing to do during springtime is to meet with your advisors and review your tax returns. Is anything else that either you can or should do to increase the value of your investments to reduce the amount of taxes that you are paying?
Options to explore include increasing your contributions to a retirement plan such as a 401K; purchasing investment property; making charitable gifts and donations; starting a business; setting up 529 plans for college; looking into Opportunity Zone investments to delay gains of your investments; and looking at possible tax credits for solar panels and electric vehicles (these come and go, so you need to see what is currently available.)
Other spring activities would include discarding unneeded or obsolete documents, including PII (Personally Identifiable Information.) Shredding works best for these types of documents.
You need to check with your tax and investment professionals to make sure that you can take advantage of some of these options. I recommend that you not do anything without first having a conversation with your advisors. If you do not have an advisor, please feel free to email me and I can recommend a tax advisor and help you personally on the financial advisory side, my email is marcs@equityplanning.com .
I hope these suggestions help you with your financial goals. By staying current, you will make your finances easier to monitor and understand and hopefully make you more efficient and your finances more effective. Until next time, I hope you enjoy the spring.
Equity Planning Inc. 7910 Woodmont Ave., Suite 900, Bethesda, MD 20814
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