Give Thanks for These 3 Tax Tips

As many Americans prepare to gather around the family table to enjoy a fantastically filling Thanksgiving dinner, we should also take time to be thankful for so many other things in our lives: our families, friends, work, health and finances. Here are some ideas of ways to show thanks through our finances.

1. Be thankful through charitable contributions. Although charitable giving should be something you consider doing all year, Thanksgiving is a wonderful time to think about charitable contributions. Not only can giving to charitable organizations help you do good for others in need, but it can also have valuable tax benefits. However, the first rule of charitable donations, particularly with respect to taxes, is to make sure the organization actually qualifies as a charitable organization in the eye of the Internal Revenue Service. The IRS maintains a list of current qualifying charities, which is available and searchable on the IRS website. The IRS is explicit about the importance of using a current list, so be sure to check if your favorite charity appears on the list.

After determining the charity qualifies as a charitable organization as defined by the IRS, you can begin thinking about the taxable benefits of charitable giving. By this time of year, many of us know approximately how much money we will make in 2014. For those who itemize deductions, charitable contributions can help lower your adjusted gross income. As a rule of thumb, you are only allowed to deduct up to 50 percent of your adjusted gross income for most charitable contributions. However, there may be additional limitations. It's best to consult with a tax professional, to ensure you are both feeding your desire to give, and maximizing the tax benefit of giving.

2. Be thankful for your (tax) harvest. Simply put, tax harvesting is the idea you might sell off a stock that may have performed poorly, resulting in a net loss that offsets your capital gains tax liability. Certainly, 2014 has been a relatively good year for investors. However, that does not mean your portfolio has not included some poorer performers. Because short-term capital gains are generally taxed at a higher federal tax rate, tax harvesting can ultimately help to decrease your overall tax liability.

Thanksgiving is a good time to think about this strategy. The IRS does not approve buying or selling assets simply to lower your taxes. Under the wash-sale rule, you are not allowed to sell a stock or security at a loss within 30 days, before or after buying the same security or stock.

In addition, remember that although there are no limits on the amount of capital losses that can be applied against capital gains, there is a $3,000 limit with respect to what can be applied toward ordinary income.

3. Be thankful for 401(k) contributions. Many are fortunate to have not only a company-sponsored 401(k) plan, but also an employer who matches contributions up to a certain percentage. If that is the case for you, this is a great time to look at your annual 401(k) contributions, to ensure you are receiving the maximum amount of company match. If your employer will match up to 5 percent of your contribution, consider contributing at least that much.

In addition, if possible, try to contribute as much to your 401(k) program as the law will allow. Currently, you can contribute $17,500 annually to a 401(k) plan. If you are age 50 or older, you can contribute an additional $5,500 as a "catch-up" amount. These figures increase to $18,000 and $6,000, respectively, in 2015.

Also remember you must make your contribution before Dec. 31, in order to take advantage of these limits, and the tax benefits they often include. Be sure to consult with a tax professional for help. As 2014 comes to a close, take time to give thanks for everything in your life. As part of that effort, be strategic in your finances, to help not only your own financial situation, but others as well.

Jacob Gold is President/ CEO of Jacob Gold & Associates, Inc. and a Voya Retirement Coach for Voya Financial. He is the author of "Financial Intelligence; Getting Back to Basics after an Economic Meltdown," which was published in August 2009. Gold is a CERTIFIED FINANCIAL PLANNER ™ practitioner and Series 7, 24 and 66 securities registered.

Securities and Investment advisory services offered through Voya Financial Advisors Inc., (member SIPC) Jacob Gold & Associates Inc. is not a subsidiary of nor controlled by Voya Financial Advisors Inc. Please note that neither Voya Financial Advisors Inc. nor any of its agents or representatives provides legal or tax advice. For complete details, consult with your tax advisor or attorney.