Francetic Tax Resolution LLC - December 2020

3 GIFT-GIVING TIPS THAT WON’T KILL YOUR SAVINGS

SET A BUDGET — AND STICK TO IT. Setting a holiday budget ensures you only spend what you can afford. It also narrows down your search. If you choose to buy your neighbor something, but they aren’t your top priority, set their budget at a lower level, like $25–$50. If you have a sibling who has had a rough year and you’d like to make their holidays a little brighter, bump their budget up. This narrows the focus of what you’re looking for so you don’t stumble into something you can’t afford. Ultimately, it’s the spirit of giving during the holidays that makes them so rewarding. With a little ingenuity, you can be generous and avoid the stress of excess debt come January.

Ah, the holidays. It’s a time of sweet treats, family, and giving back — and sometimes giving a little too much. When it comes to the perfect holiday gift, many people spend too much money. The average American spends nearly $1,000 on gifts during the December holidays alone! It’s possible to cut back and make it to January without major debt. Here’s how. CHECK YOUR LIST — TWICE! The list is going to be your secret weapon to tackling the holidays with your savings still intact. Start by writing down the name of every person you’d like to get a gift for. Now, with the exception of your immediate family members, narrow the names down to your top five — top 10 if you’re really popular. Now, place the names of the people

who didn’t make the cut into a second list. If you still feel the need to do something for them, send homemade cookies or a handwritten note instead of purchasing something. This limits how much you actually have to spend! THINK BEYOND STORE-BOUGHT OR EXPENSIVE ITEMS. Sure, everyone wants this holiday season’s “it” item, but sometimes the best gifts don’t even come wrapped under the tree. Instead, look to your own talents as a clue to what you should give. If you’re a great crafter, create something unique for the people on your list. If you can offer the gift of time, provide a free night of babysitting for your friends with kids or an experience at the local theater. These gifts have a bonus factor: Recipients love the gift when they open it, and they love it when they get to use it!

THE 12 TAX TO-DO’S OF CHRISTMAS

Will You Check Them All?

You’ve heard of the 12 Days of Christmas, but who really wants swimming swans and leaping lords? I’m a fan of practical Christmas gifts, so I’ve put my own spin on that old song and created my 12 Tax To-Do’s of Christmas. If you want to get a jump on the 2021 tax season, tick these items off before the end of the year.

Notify the Social Security Administration about name changes. If you or a dependent changed your name this year, tell the SSA so you can avoid issues with your tax return or delays to your refund. Renew your ITIN. Individual Taxpayer Identification Numbers (ITINs) expire when they’re old or unused. Visit IRS.gov and search “ITIN” to check on yours. Review your business. If you’re a business owner, look into your tax relief options. Are you overlooking any write-offs? Dodge holiday scam calls. Scammers love pretending to be the IRS. Don’t be fooled! Visit Consumer.FTC.gov for a list of common scams to avoid. Give tax-free gifts. As a business owner, you can give your employees holiday gifts worth under $100 tax-free! Just be sure to give items rather than cash or gift cards.

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Make green updates to your home. You can claim a 26% residential energy-efficient property tax credit if your energy-efficient improvements are installed before Jan. 1. Set your 2021 financial goals. How much will you contribute to your retirement accounts and emergency funds next year? Nail these things down now with 2021 tax limits and incentives in mind.

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Make last-minute charitable donations. The Coronavirus Aid, Relief, and Economic Security (CARES) Act is offering an extra tax incentive for charitable donations this year. If you take the standard deduction, you can claim a deduction of up to $300 for cash donations to charity. Contribute to your tax-advantaged retirement accounts. For 2020, you can contribute up to $6,000 (or $7,000 if you’re 50- plus) to your traditional IRAs and Roth IRAs. Update your address. If you moved this year, notify USPS, your employer, and the IRS that your address changed.

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Dig up your 2018 and 2019 tax returns. This will make filing a breeze!

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Make an appointment with your tax preparer. Tax season is coming, and I’m here to help! Make an appointment today so we can make sure your return is filed promptly and correctly, no matter how complicated it is.

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