Editors' pick: Originally published Nov. 1.
Well, it's the fourth quarter -- which makes your 2016 tax bill look a lot less abstract and a lot more imminent.
We know that New Year's Day is still two months down the calendar, but financial advisors want to remind you that it's coming up a lot sooner than you think. That said, this is a great time to make year-end tax moves and reduce what you owe the folks at the Internal Revenue Service. If it can put more money in your pocket, why not give it a shot?
"As we enter the end of the year, taxes are on many of our clients' minds," says Mike Lynch, vice president of strategic markets at Hartford Funds. "We encourage reps and clients to think about this all year long, so that we aren't scrambling at the end of the year by discussing being tax diversified."
Rebecca Pavese, a certified public accountant, financial planner and portfolio manager with Palisades Hudson Financial Group's office in Atlanta says that calculating your income, tax payments and deductions to date, and estimating your totals for 2016 is a good start.
"You need this baseline information before making any moves," she says.
Once you've done that, the easiest way to save is by reducing your taxable income. Bankrate.com's Kay Bell notes that boosting your retirement savings can be particularly helpful. If you haven't made your maximum $18,000 contribution to your 401(k) ($24,000 for people age 50 or older) or $5,500 contribution for an IRA ($6,500 for people age 50+), now is the time.