8 Tax Tips You can Use Now
November 13, 2018
Taking advantage of tax savings is a gift that keeps on giving. Read on and take advantage of these eight tips before the end of the year.
First, use up your Flexible Spending Account (FSA) funds. Make sure you use all of the money in your FSA by December 31st, so you don’t lose it. Buy new Glasses or contact lenses, visit your dentist, and purchase any other necessary (and eligible) over the counter medications or items.
Second, Make contributions to a qualified education savings account. Contributing to a child’s or grandchild’s 529 college savings plan or other qualified education savings plans means that you may be able to claim at least a partial deduction or credit on your state tax return. Be sure to check the tax rules for your state.
Third, make charitable contributions. Making a donation of clothing or household goods by December 31st allows you to deduct their fair market value on your tax return. If you prefer to make a monetary donation, send in payment by the end of the year and make sure you obtain a receipt for your records.
Forth, claim miscellaneous tax deductions. If you claim the standard deduction instead of itemizing personal deductions on your tax return, you may still be able to claim additional deductions to lower your gross income. This can include student tax breaks, electric car purchases and IRA contributions. If you have any investments that have generated deductible losses, you can use the losses to offset any gains.
Fifth, deduct your car mileage for business use. If you are self-employed, compare the actual expense method or the IRS standard mileage rate to determine which gives you a larger deduction on your car expenses. Select the method that gives you the greater write-off.
Sixth, take advantage of the gift tax. You can give up to $15,000 to an unlimited number of individuals before December 31st with out filing a gift tax return. If you’re married and file taxes jointly, you and your spouse can gift up to $28,000 per recipient.
Seventh, maximize retirement plan contributions. Contribute as much as you can to your 401 (k) and other qualified retirement plans by the end of the year in order to lower you tax bill. Keep in mind that you have until April 15th, 2019 to fund a traditional or Roth IRA for 2018.
Finally, move up deductible expenses. You may want to reduce your tax bill by moving up as many deductible expenses as possible. This can be especially beneficial to you and your income will be high. For example, make your January mortgage payment in December, giving you extra interest to deduct.
Our firm can help you implement these and other tax planning strategies before the end of the year. Reach out to us as soon as possible so we can offer you customize advice on how to lower your tax bill. Please call 844-484-8881 for our Altona office, 309-856-8888 for our Kewanee office, and 844-667-2315 for our New Windsor Office.