Last Minute End of year Deductions

3 Replies

So time is running out to lower my taxes next year. I've done a couple flips this year that I plan to expense the rehab costs but I was wondering if there are any other things I can do to absorb some of the taxes. I own a small painting business in addition to being on staff at a church part time leading worship. I don't have any retirement so I was considering opening either a self directed IRA or Solo 401k. From what I read that would be deductible dollar for dollar. I'm just curious what would be the best route to go?

Jeff,

Are you open to working with an accountant/financial advisor remotely? I recommend finding an accountant/financial advisor. You may want to consider working with your advisor remotely to expand your options.

I would also recommend looking for an accountant/advisor who is willing to work with you throughout the year. You want an advisor that can help you strategize and who is responsive when you want to know the consequences of the financial decisions you are making throughout the year.

You should also look for a Fee-only advisor who is not going to sell you a product and/or try get a commission.

Good luck and let me know if you have any questions.

@Jeff Nichols

While you can self-directed both, IRA and Solo 401k, the latter would give you several advantages. The one that would apply to you the most significantly higher contribution limit. Yes, the contributions are tax deductible, but while IRA allows you to contribute only $6,000/yr, Solo 401k contribution limit is $57,000. 

@Jeff Nichols

Solo 401k / SEP IRA are both options that you can use to reduce your taxable income. The timing of the contribution does not need to be made by the end of the tax year.