Posted by MyTaxDog

10 Last-Minute Tax Tips before 2019 Ends

10 Last-Minute Tax Tips before 2019 Ends

When filing early for your return in 2020, the following tips prevent you from spending unnecessary amounts on your taxes and help you save a lot of money.

1. Determine if you want to itemize or take the standard deduction

One of the main concerns in planning for the end-the-year tax is if you expect your deductions to be itemized. Everyone has the right for a standard deduction, you will save a lot of time and trouble if what you are likely to be able to itemize is higher than your standard deduction amount. On the other hand, there are a lot of means in boosting itemized deductions once you decide that by itemizing you can save a lot of money.

2. Donate or contribute to charities

The amount you donated to charities is deductible if you itemize your deductions. Cash donations as well as donating a property can also be deducted to your returns but you have to have the proof of your donation. Stockholders have to think about offering shares of stock that have gone up in value. By doing this, capital gain tax can be avoided by the stockholders as well as they will earn a full charitable deduction. On the other hand, processing a stock gift may take a lot of time for the broker that is why to get started you don’t have to wait until the last days of the year.

3. On-time payment on property taxes early

For as long as it does not exceed $10,000.00, property taxes and other local-level and state taxes are eligible for an itemized deduction. In some states, itemizing deductions allow you to choose either to pay the tax bill in installment basis throughout the year or pay the entire tax bill in 2019. Instead of taking advantage of delayed payment options, paying on time in 2019 will increase your itemized deduction size.

4. Paying in advance the tuition for education tax credits

With American Opportunity Tax Credit, those who are paying for college fees can claim tax savings to up to $2,500.00. Educational expenses for undergraduates are entitled to up to four years, and if your 2020 tuition for the spring semester is prepaid during 2019, you will have the chance to use those expenses when you claimed on your 2019 return the credit.

5. Try to find for ABLE accounts for disability-related expenses

Disabled individuals mostly face financial challenges that many others are nor having. They are allowed to open ABLE accounts by the tax laws to allow savings for disability-related expenses without the risk for availing the government programs and public assistance. In 2019, a maximum of $15,000.000 can be contributed by loved ones toward an ABLE account but these contributions must be completed on the last day of the year.

6. Review your flexible spending account

Most of the employers are offering flexible spending accounts to help their workers with medical expenses, especially during emergencies. In spite of this, use-it-or-lose-it provisions are usually what most of the FSAs are offering which requires you to spend the intended money to be able not to forfeit it each year. Checking the details on your plan with your Human Resource Department is a must since some of the employers are allowing their employees to spend their money into the following year.

7. Explore and assess on the idea of converting a traditional IRA to a Roth

It will cost you a lot of money to spend in taxes for 2019 if you convert a traditional IRA into a ROTH IRA. But this idea will help you save a lot in your retirement savings to grow tax-free when you withdraw it or even if it remains in the ROTH account. To be effective for 2019, you must have the conversion by December 31.

8. Explore the idea of availing educational opportunities for yourself

The Lifetime Learning Credit applies to anyone, not like the American Opportunity Credit for college expenses of undergraduates. It includes classes for you to improve your job skills and seeking a professional degree as well. It is worth a try to avail of the Lifetime Learning Credit if you are looking forward to enhancing your career with its credit of 20% up to $10,000,00 in qualifying educational expenses.

9. Tax preparation timeline must be set

Late of January is when the tax season officially starts, however, it is important to know when and how your return will be prepared. Knowing when you will receive tax forms with knowing what information you need to do to your return, you will be able to set the best timeline to get your return filed on time.

10. Don't miss out on the opportunities to save a lot in tax

You will save a lot of time and money if you spend just a little time learning these tips. Start planning before January 1 and you will see the result in April and you will be a lot happier.

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