17 Nov Lowering taxes after a raise

Q. I got a raise this year but I never increased my 401(k) contributions. I know I’m going to get socked with taxes. Is it possible to contribute extra till the end of the year, and how else can I lower my tax bill?
— Fell behind

A. Congrats on the raise.

You’ve got lots of opportunities to lower your taxes for the year.

First, yes, you can contribute more to your 401(k) prior to the end of the year.

It should be as easy as contacting your payroll department at work, said Howard Hook, certified financial planner and certified public accountant with EKS Associates in Princeton.

There are a few items you should think about.

“It may take a pay cycle or two to adjust the amount — all plans are different,” Hook said. “You should ask your payroll department how long it will take so you can plan on how much you wish to increase it by.”

And if you do increase the amount, Hook said you may want to schedule a reminder for yourself to re-adjust it at the beginning of next year.

“For people that wish to catch up this time of year and put a lot of money in, they may be shocked when the calendar turns to January and they have not adjusted the amount back to reflect that they can contribute over a full year’s worth of paychecks,” Hook said.

There are several ways to otherwise lower your tax bill, and donating to charity should top your list.

Hook said if you find you do not have excess cash — many of us do not have excess cash this time of year — you can donate non-cash items such as clothing, toys, electronics, and more, and still get a deduction.

“Remember to get a receipt for anything you donate at the time you make the donation,” he said. “Also, avoid using a donation box located at the charity – rather, give any non-cash items to a live person who can hand you a receipt.”

Email your questions to .

This post was first published in November 2016.