Your 2018 tax return isn’t due until April, but if you want to pay less taxes or maximize your refund, you can't waste any more time.
According to Money Talks News, there are three things you need to do before the end of the year that can make a big difference.
The 2018 tax year ends on Dec. 31, so that’s the last day to do anything that will affect your 2018 tax return. So what can you do between now and then? For starters, contribute to your workplace retirement account. The max you can save in a 401(k) is:
- For workers age 49 or younger: $18,500
- For workers age 50 or older: $24,500
This is income that won’t be taxed and can make a big difference.
Money Talks News says your next step deals with required minimum distributions, or RMDs. This applies to anyone who turned or will turn 70 ½ in 2018 or earlier and who have certain types of retirement accounts. If these mandatory withdrawals apply to you and you fail to take them in full, the IRS is likely to hit you with a tax penalty.
Finally, according to Money Talks News, the third thing you need to do before the end of the year is make sure you spend all of the money in your flexible spending account. An FSA lets you pay for eligible out-of-pocket medical expenses tax-free. The catch here is that unlike health savings accounts, FSA's are use-or-lose-it. Make sure you check your account balances now so that you don't leave any money on the table going into 2019.