Hyden, Miron & Foster, PLLC Law Blog

Monday, December 26, 2016

Year-end tax planning: More savvy moves to take

How can you save on taxes this year? 

As the year comes to a close, most of us are thinking more about holiday parties and last minute gift purchases than we are about maximizing our tax position. But, with just a few easy moves, you could save yourself a ton of cash and enter the new year ahead of the game.

CBS’ Moneywatch recently posted an article on smart tax moves for homeowners, investors and those who are self-employed.  They had some pretty sound advice when it comes to maximizing tax savings this year. For homeowners, they recommend:

  1. Pay 2017 Property Tax NOW. One of the best deductions you have is real estate taxes, so why not consider taking 2017’s a bit early? As with any tax recommendation, be sure to check with your tax attorney to ensure that you are not foiling other aspects of your tax planning.
  2. Pay January 2017 Mortgage Payment This Month. Another great deduction is the mortgage interest deduction. Why not add a little more to your 2016 deductions by paying your mortgage bill in December?
  3. Deduct Home Office Expenses. If you’re a homeowner who earns money through self-employment, you can claim $5 per square foot of your home, up to 300 square feet or $1,500 for the portion of your home that you use exclusively for business endeavors. If this deduction applies, start gathering your documentation today.
  4. Install Energy-Efficient Equipment. If you’ve been thinking about installing solar panels or replacing your water heater, now is the time to do it so you can qualify for a tax credit of up to 30% of the cost of the equipment.

For those self-employed individuals, be sure to take advantage of the IRS’ generous 401(k) provisions. Did you know that you can make contributions as both an employer and an employee? Depending on your age, you can make contributions to your 401(k) of anywhere from $18,000 to $24,000 as an employee. Depending on how you’ve structured your business, you may also be able to contribute an additional 20% of your net income to your 401(k) as an employer. If you haven’t opened up a self-employment 401(k) plan, do it before December 31st to reap the tax benefits.

Finally, if you think you may have investments in which you have realized capital gains, now is the time to figure out if there are some investments with unrealized losses you can sell to offset those capital gains. Most major brokerage firms have online systems that make it simple to assess your investment positions. 

The clock is ticking, so do yourself a favor and take advantage of as many tax breaks as you can before you ring in the new year.

Want to make the most of your income?

The experienced tax attorneys at Hyden, Miron & Foster can assess your financial situation and provide you with a solid road map to protecting your assets and getting the most financial rewards for your work. Contact us today or call 888.770.1848 for a consultation.

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