Helpful tips to maximize your 2025 tax bill

NEWS 5. OKAY. IT IS HARD TO BELIEVE FOR ME. I WILL SAY THAT, BUT 2025 IS ALMOST AT THE END AND THAT MEANS TAX SEASON IS ALMOST HERE. RIGHT NOW. THE BET IS THE BEST TIME TO TAKE A LOOK AT YOUR FINANCES TO LOWER THAT TAX BILL. JOINING US NOW IS MEGAN HAMMOND, FINANCIAL DIRECTOR WITH PLANNING WITH WEALTH QUEST. MEGAN, THANKS SO MUCH FOR JOINING US. THANK YOU FOR HAVING ME. AND HERE I THOUGHT YOU MIGHT HAVE BEEN TALKING ABOUT CHRISTMAS GIFTS, BUT WE’RE TALKING ABOUT TAX SEASON. I MEAN, OKAY ALREADY. SO IT’S A LITTLE EARLY BUT NOT TOO MUCH. HOW SHOULD PEOPLE APPROACH THE YEAR END TAX PLANNING TO HELP THEM MINIMIZE THAT 2025 TAX BILL? YEAH, THIS IS A GREAT TIME TO START PLANNING UNFORTUNATELY. RIGHT. WE ALREADY HAVE A LOT OF THINGS GOING ON. BUT WHAT WE REALLY WANT TO FOCUS ON ARE THE DEADLINES. AND SO THERE ARE CERTAIN TAX STRATEGIES THAT HAVE A DEADLINE OF DECEMBER 31ST, LIKE CHARITABLE CONTRIBUTIONS. THERE ARE OTHER TAX STRATEGIES THAT HAVE A DEADLINE OF APRIL 15TH, LIKE MAKING CONTRIBUTIONS TO INDIVIDUAL RETIREMENT ACCOUNTS. AND SO IT’S REALLY IMPORTANT THAT WE KNOW THE THINGS THAT WE NEED TO MOVE ON BEFORE THE END OF THE YEAR AND THE THINGS THAT CAN WAIT. RIGHT. AND I WILL ALSO SAY THAT FINANCIAL INSTITUTIONS ARE REALLY BUSY THIS TIME OF YEAR, LIKE ALL OF US. AND SO IF THERE’S SOMETHING THAT YOU WANT TO GET DONE, MAKE SURE THAT YOU PUT THAT IN AND GIVE THEM TIME TO PROCESS IT, BECAUSE WE DON’T WANT TO MISS OUT ON TAX PLANNING STRATEGIES AND OPPORTUNITIES BECAUSE PAPERWORK WASN’T DONE CORRECTLY. ALSO, PROBABLY A GOOD TIME TO START LOOKING FOR THAT PAPERWORK. I KNOW, LIKE A SATURDAY NIGHT, I’M GETTING READY IN THE SHIRT THAT I WANT. I CAN’T FIND ALL OF A SUDDEN, AND THAT’S PROBABLY HOW IT IS WITH TAX PAPERWORK AS WELL. IT IS NOW. A LOT OF THAT’S GOING TO COME AT THE BEGINNING OF THE YEAR. SO YOU’LL GET THAT IN JANUARY, FEBRUARY, MAYBE MARCH, BUT THIS CAN BE A GREAT TIME TO GO BACK AND LOOK AT. I THINK A LOT OF PEOPLE HAVE A HARD TIME FIGURING OUT WHAT THEY’RE EVEN ELIGIBLE FOR, WHAT KINDS OF CREDITS AND DEDUCTIONS ARE POSSIBLE. SO THIS IS A GREAT TIME, ACTUALLY, TO PULL OUT LAST YEAR’S TAX RETURN. LOOK AT YOUR INCOME. LOOK AT THE CREDITS AND DEDUCTIONS THAT YOU WERE ELIGIBLE FOR. AND THEN THINK ABOUT ANY CHANGES THAT HAPPENED THIS YEAR. SO DID YOU GET MARRIED? DID YOU HAVE A BABY? DID YOU SEND A KID OFF TO COLLEGE? AND THAT CAN START TO GIVE YOU AN IDEA OF THE OPPORTUNITIES THAT MIGHT BE AVAILABLE FOR YOU THIS PARTICULAR TIME OF YEAR. NOW, MEGAN, WHAT ARE STRATEGIES THAT COULD HELP PEOPLE THAT THEY SHOULD CONSIDER TO LOWER THEIR TAX BILL OR THEIR TAXABLE INCOME? YEAH, SO SO TAXABLE INCOME AND CREDITS AND DEDUCTIONS, YOU KNOW THOSE GO HAND IN HAND BECAUSE CREDITS AND DEDUCTIONS OFTEN HAVE AN INCOME THRESHOLD. AND SO WHAT WE WANT TO DO IS WE WANT TO TRY AND LOWER OUR TAXABLE INCOME AS MUCH AS POSSIBLE SO THAT WE CAN MAKE OURSELVES ELIGIBLE FOR AS MANY TAX SAVINGS OPPORTUNITIES AS WE CAN. SO SOME OF THE GREAT WAYS THAT WE DO THAT, I THINK CONTRIBUTING TO A TRADITIONAL IRA IS REALLY POPULAR OR HEALTH SAVINGS ACCOUNTS, IF THAT’S SOMETHING THAT YOU’RE ELIGIBLE FOR, THOSE ARE REALLY EASY, COMMON THINGS. THERE’S ALSO SOME MORE ADVANCED TAX PLANNING STRATEGIES LIKE TAX LOSS HARVESTING, WHICH MEANS THAT YOU SELL INVESTMENTS AT A LOSS INTENTIONALLY AND THEN USE THOSE LOSSES TO OFFSET GAINS THAT YOU HAD EARLIER IN THE YEAR. BUT IT’S ALSO A GREAT OPPORTUNITY TO REBALANCE YOUR PORTFOLIO. SO A LITTLE BIT MORE COMPLEX. TALK WITH A PROFESSIONAL TO MAKE SURE THAT THAT’S THE RIGHT THING FOR YOU. BUT THERE ARE A LOT OF OPPORTUNITIES OUT THERE. AND HOW SHOULD PEOPLE THINK ABOUT TAX STRATEGY FOR THE LONG TERM? YES. SO I THINK MOST OF US WANT TO TRY AND MINIMIZE TAXES AS MUCH AS WE CAN YEAR TO YEAR, BUT WE ALSO WANT TO THINK ABOUT THE COLLECTIVE TAXES THAT WE PAY OVER OUR LIFETIME, WHICH IS A LITTLE DAUNTING TO THINK ABOUT, BUT WE REALLY WANT TO FIND TIMES WHEN WE HAVE BIG FINANCIAL CHANGES IN OUR LIFE. SO MAYBE OUR INCOME IS SIGNIFICANTLY HIGHER. ONE YEAR WE HAVE A BABY, THE YEAR WE RETIRE AND OUR INCOME DROPS. THOSE OFTEN CREATE SOME POTENTIALLY GREAT TAX PLANNING OPPORTUNITIES FOR US. SO FOR EXAMPLE, IF WE HAVE A YEAR WHERE WE HAVE SIGNIFICANTLY MORE INCOME, THAT MIGHT BE A YEAR WHERE WE WANT TO BUNCH SEVERAL YEARS OF CHARITABLE GIVING INTO THAT ONE YEAR, WE CAN ITEMIZE OUR DEDUCTIONS AND LOWER OUR TAXES THAT ARE IN A HIGHER TAX BRACKET, AND THEN USE STANDARD DEDUCTIONS IN FUTURE YEARS. SO WE WANT TO THINK NOT JUST YEAR TO YEAR, BUT WE WANT TO THINK BIG PICTURE AND LOWER OUR COLLECTIVE TAX BILL OVER OUR LIFETIME. ALL RIGHT. MEGAN HAMMOND, DIRECTOR OF FINANCIAL PLANNING WITH WEALTH QUEST, THANKS SO MUCH FOR JOINING US AND GETTING US TO A HEAD START ON TAX SEASON. WE’LL GET EVERYBODY THERE. AL