Is a financial review on your New Year’s resolutions list? If it’s not, it should be! As any accountant in Ellicott City, MD will tell you, financial reviews are crucial for establishing and maintaining a healthy budget. The office of John S. Curtin, CPA Chartered has some tips on what you need to go over during this process:
- Take advantage of tax reductions – Remember that any changes to your income distribution could have a direct impact on your taxes. Most taxes for long-term profits and equity dividends are more reduced than taxes for average income rates. These tax reductions should give you a higher incentive to hold onto any mutual funds or equity funds for increased periods of time.
- Consider education expenses – Will education be playing a major role in your future financial decisions? If so, you need to consider opening up a 529 college savings account. Any contributions you make to a 529 plan are compound tax-deferred. This means that any withdrawals you make in the future will be tax-free. However, any money withdrawn must be certified as a higher education expense in order for you to receive this tax benefit.
- Contribute to an Individual Retirement Account (IRA) – Try to contribute the maximum amount of $5,500 to a traditional or Roth IRA. This will allow you to expand your own retirement savings. The tax requirements for any income you withdraw after a certain age may vary depending on the type of IRA you have. Consult with a financial adviser to confirm any and all restrictions that may apply to your accounts.
An accountant knows exactly what to do to help you review your finances. Call John S. Curtin, CPA Chartered for assistance with all of your financial plans, including tax preparation in Ellicott City, MD. Schedule a consultation with us today so we can help you start the new year off right.