A New Year and New You is upon you, making it important to employ the best tax tips that could lower your taxes!
It’s a New Year and a New You, making it important to employ the best tax tips that could lower your taxes!
Do yourself a favor and start now, because you could save yourself thousands of dollars and avoid any costly penalties from the IRS.
#1: Your IRA Accounts
If you haven’t contributed any or all you’d like to contribute to your retirement accounts for 2019, there is still time!
This is a great tax tip is because the deadline for 2019 contributions to a traditional or Roth IRA is April 15, 2020, so, square away some funds now to supplement your retirement.
In 2019, the maximum IRA contribution you can make is $6,000 and $7,000 if you are age 50 or older.
For the self-employed with no employees, you can contribute as much as $56,000 to a solo 401K account!
#2: Last Minute Estimated Tax Payments
Remember, it’s a New Year and New You, so the best rule of thumb is to get ahead of potential problem areas.
If you haven’t paid enough to the IRS during the year and you want to put your mind at ease, making a last-minute estimated tax payment is a great way to avoid big interest and penalties!
By making an estimated payment by January 15th, you can prevent any penalty for Q4!
Here’s some more good news, if the majority of your income occurred after August 31st, you can file Form 2210 – Underpayment of Estimated Tax.
This will annualize your estimated tax liability and could reduce any extra charges from the IRS that you might be looking at.
#3: PLAN NOW!
Getting your documents together now and ensuring you file the proper tax forms will benefit you come tax time!
Some places for you to start your organization process include:
- Compile all the tax documents you’ll need to complete your tax return.
- Keep all the information that comes in the mail in January, such as W-2s, 1099s, and mortgage interest statements.
- Collect receipts and information that you have piled up during the year.
- Make sure you know the price you paid for any stocks or funds you have sold.
- Own Property? Know the details on income from rental properties.
#4: Itemized Tax Deductions
You can save yourself more by itemizing your tax deductions!
It is very much worth your time if your qualified expenses add up to or exceed the standard deductions of $12,000 for individuals and $24,000 for joint filers.
Small Business Owners, do yourself a favor and consult a tax professional to ensure you can do all you can do in this area!
From all of us here at Borshoff Consulting, we wish you and your family a Happy Holiday Season.