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Take these 3 end-of-the-year steps to save on taxes

Most people don’t associate the holiday season with taxes, but this year is a little bit different. This year marks the first major overhaul of the United States tax system since the presidency of Ronald Reagan in the ‘80s. The new tax code, passed by conservative lawmakers and signed into law by President Trump, will affect taxes for millions of Americans.

Your end-of-the-year tax planning will no doubt be affected by the overhaul as well. Tax season may not be upon us quite yet, but that doesn’t mean that you can’t prepare now. Taking a few steps at the end of the year can greatly benefit you once the April deadline rolls around. These are three simple tips that you can use now to save on your taxes later.

1. Pay your 2018 property taxes now

No one enjoys paying taxes, so why in the world would you want to pay more of them? Well, if you itemize your deductions, pre-paying your 2018 property taxes could actually work out in your best interest. The new tax law caps deductions at $10,000 as of next year. If you want to maximize your deductions, you should pay those property taxes before the bill takes effect on January 1.

2. Make the most of your deductions

Next year, standard deductions will increase for single taxpayers and married couples filing together. If you are single and your deductions fall below $12,000 or you are married and your deductions fall below $24,000, you will not be able to itemize your deductions starting in 2018. Because of this, you may wish to make some charitable donations now, when the value of the deduction will be greater.

3. Defer your income until next year

If your tax bracket is going to decrease, you may have an incentive to defer your income until 2018. After all, why pay, say, a 39.6 percent tax rate when you could pay next year’s lower rate of 37 percent? Of course, this isn’t possible for everyone. But if you are expecting a year-end bonus or you are a contractor, consider talking to your employer or client about delaying payment for a few more weeks.

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