You're probably already familiar with a few common strategies, like donating money to charity. But there are many other potential tactics that may work for you too.
Here are 10 year-end tax tips for individuals:
- Defer your bonus. Because income is taxed the year you receive it, try and see if you can defer any holiday or year-end bonuses into next year so that you don't have to worry about it this year.
- Talk with your spouse. Tied the knot this year? You may want to sit down with your significant other and figure out your potential tax consequences, and how you want to declare your income.
- Contribute to your IRA. Putting money into an IRA may allow you to deduct some or all of your contribution. Remember, you can contribute up to $5,500 this year.
- Deposit into your 401(k). Much like an IRA, depositing into your 401(k) can prove to be beneficial for tax purposes by reducing your taxable income.
- Donate to charity. Charitable donations are always a good way to earn some tax deductions. Remember, however, that they must meet certain criteria -- not all donations to charity are tax-deductible.
- Go green. If you upgrade to an energy-efficient appliance, you may be able to qualify to receive a tax credit for up to $500 for the environmentally friendly updates you make -- this includes stoves, water heaters, and air conditioners.
- Pay into a flexible spending account. If your employer offers a flexible spending account, you can save by contributing to it. On top of that, both you and your employer can potentially avoid employment or federal income taxes on the money.
- Get your deductions lined up. If you're self-employed, making sure that you have all your deductions lined up now will save you time when Tax Day rolls around. While there are additional requirements for those who are self-employed, one's self-employment tax is also deductible up to 50 percent.