There are only a few days left in 2019. With that, you may be wondering what last-minute things you can do to help reduce your taxes. Here are a few things to consider:
Donate to Charity
Donating to charity is not only a great thing to do, it also may be a great tax benefit. As long as the charity is a qualified nonprofit, the amount you donate may provide you with a tax deduction. Just a reminder, with the tax changes fewer taxpayers are able to itemize, but if you are someone who still can, consider making that last-minute charitable donation!
Maximize Your Retirement
Saving for your future is one task you should work on regularly. Making a contribution to your retirement account, whether you have a 401(k) or a Traditional IRA, can help reduce your taxable income. If you can, make it a point to maximize your contribution. The maximum amount you can put into an IRA for 2019 is $6,000 ($7,000 if you are over 50). For 401(k)s it is $19,000 ($25,000 if you are over 50). Keep in mind, you can make a contribution to your IRA up until April 15, 2020 and still have it count for the 2019 tax season.
Offset Capital Gains with Capital Losses
If you are fortunate enough to have sold stock or other assets at a gain in 2019, take a look at your portfolio and see if you have any underperforming stocks or assets that you can sell before year end. The realized capital loss on these sales will offset the gains on your winners. Keep in mind that if you sell a stock or asset for a loss you must wait 30 days before buying that investment back to deduct the loss.
Start Gathering Your Tax Paperwork
If you’re not working between Christmas and New Year, take some time and work on gathering your tax paperwork. Start going through that mound of paperwork and organizing it for when you have to drop it off with your CPA. Yes, we know this is not something you want to think about doing when off of work, but it will save you stress and sleepless nights!
We hope you had a great 2019 and look forward to working with you in 2020. Keep us in mind, should you ever need assistance with any accounting, payroll or tax needs. Don’t forget to call us in the New Year to set up your tax appointment!