As 2016 draws to a close and we move into the holiday season, you probably have a lot going on in your life. But it may be worth your while to take some time to explore a few year-end investment and financial moves that can potentially pay off for you when you file your taxes in April. 
Here are a few such moves to consider:
• Boost your 401(k) contributions. Unless you have a “Roth” 401(k), your contributions are made with pretax dollars – so the more you put in, the lower your taxable income. Ask your employer if you can increase your 401(k) contributions for the remainder of the year. (For 2016, you can contribute up to $18,000 to your 401(k), or $24,000 if you’re 50 or older.) Also, if you receive a bonus before the year ends, you may be able to put that toward your 401(k) too, thus deferring the taxes you’d have to pay on this extra income. 


• Add to your IRA. You actually have until April 18, 2017, to contribute to your IRA for the 2016 tax year, but the more you can put in now, the less you’ll have to come up with at the filing deadline. Contributions to a traditional IRA are generally deductible, but the deductibility is phased out if your income rises above certain levels. For 2016, you can put up to $5,500 in your IRA, or $6,500 if you’re 50 or older. (Roth IRA contributions are never deductible.) 


• Contribute to a 529 plan. When you contribute to a 529 plan, any earnings growth is distributed tax-free, provided it is used for qualified higher education expenses. (However, 529 plan distributions not used for these qualified expenses may be subject to federal and state taxes and a 10% penalty on the earnings.) Furthermore, your 529 plan contributions may be deductible from your state taxes. 

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This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.
Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation.