While it may be hard to believe, the government actually wants you to be rich. So in order to keep more money in your pocket as the year comes to a close, take these 5 tips:
1. Start a Business on the Side
For anyone who is an employee, consider starting a business on the side. With the Internet, it’s easy to set up a home business overnight. Pick your passion, set up a website, and form your LLC or corporation before year-end to maximize your 2016 deductions.
2. Donate Stock versus Cash
To avoid capital gains tax, donate stock that has gone up in value directly to a favorite charity. This stock versus cash donation approach is a win-win for the non-profit and you.
3. Avoid tax on IRA Withdrawals with Stock Donations
To avoid tax and penalties on an IRA withdrawal, donate the amount directly from an IRA to charity. Instead of taking a distribution, this approach can be a major money saver. It may also free up other deductions as it reduces your adjusted gross income compared to taking the distribution and donating the money personally.
4. Buy new equipment by year-end
Invest in new equipment such as a computer, cell phone or scanner before the end of December to maximize deductions. While it is best to only buy what is needed, deductions may be reduced next year with Trump Tax Reform so buy now versus later.
5. Invest in Financial Education
Instead of buying a flat screen TV this holiday, invest in a financial education program to increase your knowledge and year-end deductions. Schools do not teach you how to create a positive cash flow, so sign up for a class on real estate or stock market investing to learn how to increase your income.
– Tom Wheelwright
Rich Dad Advisor
For more tips on creating success in business and in life, Click here.