Can I Reduce My Taxes by Timing My Income?

Yes — strategically timing when you receive or recognize income can reduce your tax bill. If you expect to be in a lower bracket next year, defer income (like a year-end bonus) to January. If you expect higher income next year, accelerate income into the current year. Self-employed individuals can delay sending December invoices until January to push income into the next tax year. Conversely, if you're near the top of your current bracket, triggering capital gains now at a lower rate might save you money. Timing strategies work best when combined with a clear picture of both years' income — a CPA can model the scenarios for you.