Tips to Get Through the Holiday Season and Prepare for the Upcom - KAUZ-TV: Newschannel 6 Now | Wichita Falls, TX

Tips to Get Through the Holiday Season and Prepare for the Upcoming Tax Season

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The holiday season is in full swing and finances can quickly get out of hand. But shopping and spending isn't the only thing on Texoman's minds.

"As we approach the end of the year, people start thinking about the amount of income taxes they're going to owe next year. So they begin to think about other ways they can reduce their taxes a little bit," said MWH Group Certified Public Accountant Barry Plaxco.

Tax season starts as soon as New Years hits, so Plaxco offered some ways to save money.

"You can defer or postpone income that you recognized in a given year. There's also other ways to accelerate deduction into the current year," he said.

Some Texomans are already preparing and doing just that.

"You've got to use your head. You should always think about saving a little money during this time," said Wichita Falls resident Lawrence Teague.

"Normally when my husband and I get our checks, we would buy things for the house or presents or something like that. But instead, we paid all of our bills first," said Stephanie Mendoza, another Wichita Falls resident.

During this season of giving, there's a way to make a difference in someone's life all while being money smart.

"You can make a contribution of marketable security taxes or mutual funds to the non-profit and get a charitable deduction for the fair marketable value of the investment. You don't have to pay the tax on the gain that's in the security," said Plaxco.

Business owners can also make some smart money moves. By choosing not to bill certain customers for the completed work or services until January, it would delay that income until next year and it would not be included in this year's taxes.

However, when it comes to business purchases, Plaxco recommended doing the exact opposite.

"If you're in a business and you are needing to buy some computer equipment, office furniture or a new car for your business, you might consider trying to purchase those and put them into use before December 31. That would give you a significant deduction in the current tax year," said Plaxco.

The benefit of getting a business deduction that can be applied in the current tax year won't be around for long. In 2014, it is scheduled to decrease significantly and will be capped at $25,000.

For any questions about the upcoming tax season, Plaxco high recommends consulting with a tax professional.


Cynthia Kobayashi, Newschannel Six.