NEW YORK, Dec. 14, 2015 /PRNewswire/ -- With the countdown to the New Year's ball drop approaching, now's the best time for taxpayers to review their 2015 tax situation. By following a few simple steps, you can save money and ease the stress of filing leading up to tax day.
"One of the best ways to maximize your tax refund is to be proactive about your tax planning before the year comes to a close," said Greg Rosica, contributing author to the EY Tax Guide 2016. "Whether you do your own taxes or rely on a tax professional, these tried-and-true strategies may help you keep more of your hard-earned income and boost your after-tax returns. After all, it's what you keep that counts."
Five year-end tips tax payers should consider:
1) Stockpile money in tax-advantaged retirement accounts: You have until April 15 to contribute to an IRA, but you must arrange to deduct extra 401(k) plan contributions from your 2015 paychecks or year-end bonus by year end. Deductible contributions will reduce your taxable income and your adjusted gross income.
2) Gift your assets: In 2015, you can give cash, securities or other property valued at up to $14,000 to as many people as you want without filing a gift-tax return or dipping into the credit that will protect your estate from the federal estate tax.
3) Identify shares of stock and mutual funds that you want to sell: 2015 saw quite a bit of volatility in the stock market. If you want to sell shares that you purchased at different times, select those in which you have a high tax basis in order to reduce taxable gain or increase a tax loss that may be used to offset other taxable income.
4) Use your capital losses: If you had capital gains this year, consider offsetting those gains by selling property in which you have unrealized capital losses.
5) Donate to charity: Charitable contributions are an effective last-minute tax deduction, so consider giving appreciated stocks that you've held long term to public charities or donor advised funds to get the full value of a deduction.
The EY Tax Guide 2016 contains these tips and more that taxpayers should focus on before ringing in the New Year. Visit www.ey.com/EYTaxGuide for more tips, suggestions and email alerts for information on up-to-the-minute tax law changes as they happen.
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This news release has been issued by Ernst & Young LLP, member firm of EY serving clients in the US.
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