2015 is quickly coming to a close, but there are still some things you can do to help you get a bigger tax refund (or owe less, if that’s your case).
1. First, Make a Decision: Itemize or Not?
Some of the tips below will only apply if you itemize your deductions. Figure out now if it’s worth it to itemize, or opt for the standard deduction ($6200 for individual, $12600 for married, filing jointly).
2. Make Energy-Efficient Home Improvements
Have some extra cash to do some quick home improvements? Make it a green one! Certain energy-efficient home improvements may qualify for a tax credit that can help you get up to 30% of the cost back. Plus, you may save more on your electric bill each month. Check out EnergyStar.gov for more details.
3. Open a Health Savings Account
If you have a high-deductible health plan with no additional insurance or Medicare, you can have a Health Savings Account (HSA) and deduct contributions. Besides the tax-deductible contributions, earnings on the account are tax free, withdrawals for qualified medical expenses are tax free, and any unused money can be used in future years (unlike the FSA).
4. Pay Extra on Your Mortgage
If you’re itemizing deductions, try to make an extra mortgage payment this year. This can also be as simple as mailing the January mortgage early so it’s received and processed by December 31. The extra contribution can increase your deduction.
5. Consider Converting to Roth
Roths are tax-free and penalty-free to withdraw from as long as you’re at least 59.5 years and the converted account has been open for at least five years.
6. Donate to Charity
This is another one affected by itemized deductions. If you donate money or goods to charity, you can make it a deduction. A few bags full of used clothes can be worth hundreds, so hopefully you’ve kept records of what you donated and have the receipts.
If you’re donating more than $250 in cash to a charity, you will need acknowledgement from that charity.
7. Gift Your Family Members
If you have a family member in need, it’s best to get them at least some of the cash they need before the new year. You can give up to $14,000/person per year without filing a gift-tax return.
If you’re capable of tackling any of these within the next couple weeks, do it! You’ll much happier when it’s time to file those taxes.