Many people only think about how to save money on their taxes right before they file them. However, the most effective way to maximize your savings is to plan your tax strategy with a CPA all year long. The accountants at Selph and Friday, CPA, located in Texarkana, TX, discuss some of the ways you can achieve more favorable figures.

CPAs Offer Tax-Saving Tips for the Year

1. Donate to Charity

Charitable giving not only contributes to worthy causes but also lowers your taxes if your itemized deductions exceed the standard amount. Donating appreciated securities such as stocks and mutual funds may be more beneficial than giving money. Anything you’ve held for at least a year is eligible for a deduction, and it helps to eliminate the capital gains tax as well.

2. Open a Roth 401(k)

Consider opening a Roth 401(k) if your employer offers one. These retirement accounts are funded with post-tax money, and when you retire, the funds come out tax-free. Although you don't receive an immediate break when you contribute to a Roth 401(k), you may save money at retirement, especially if you do so in a higher tax bracket than you are in now.

3. Contribute to a Child Care Reimbursement Account

Child care can take a large percentage of your paycheck, but you can recoup some of the costs by enrolling in a flexible spending account through your workplace. If your employer offers this, you can contribute up to $5,000 per year from your salary to cover those expenses. Since it is a pre-tax deduction, you don't need to pay state, federal, Medicare, or social security taxes on the amount.

Don’t wait until the last minute to minimize your deductions; work with the professionals to get the most out of your year. The accountants at Selph and Friday, CPA, have over 30 years of experience working with clients to resolve their IRS tax issues and secure the best possible outcome. Give them a call at (903) 792-0281 to speak to a representative. You can also visit them online to learn more about their bookkeeping services.