5 Year-End Tax Planning Moves to Help You Retire Sooner

As we approach year's end, there's still a little time left in which you can change your tax situation for 2020, and even more time to think about what it will look like in 2021. Among the key steps to take now: Carefully placing your investments in the proper accounts, calculating how your actions this year will impact your tax bill several months from now, and planning ahead to ensure you have enough liquidity available to pay what you owe.

Here are five basic moves that almost anyone can take to reduce their tax burden, which hopefully will help you reach the point where you're financially able to retire sooner.

Here's a lesser-known wrinkle for your annual tax planning strategy. While you can make IRA contributions for one year as late as April 15 of the following year, you must have opened the account by Dec. 31 of the year for which you're registering the contribution. So, for example, if you want to make a 2020 Traditional IRA contribution on April 1, 2021 (and take the deduction for 2020), that's completely fine -- but the account had to have been established by Dec. 31, 2020. There are still a couple of days left to open your IRA, and whether it's a Roth or Traditional account, it needs to be opened now for any retroactive contributions to be possible.

Source Fool.com