Lloyd Conley, MBA, EA, The Woodlands, TX helps taxpayers reduce tax burdens through careful planning called Tax Architecture!
These are my favorite Year End Tax Tips, but the real fun in tax planning and reduction comes from not waiting until year end!
401(k) Contributions: Be sure to maximize your 401K contributions for the year! That’s $19,000 for most taxpayers; + $6,000 if you are age 50 for a total of $25,000.
SEP IRA Contributions: If you are a private business owner without a 401K, you can set up a SEP IRA. Be sure to contribute the maximum: 25% of eligible business income up to a maximum of $56,000.
Traditional IRA Contributions: If you don’t have a business or a 401K, setup a traditional IRA. IRA accounts can be opened as investment accounts or even a savings account at a local credit union. (There are Income limits.) Maximum contribution is $6,000 per year plus an additional $1,000 if you are age 50.
Charitable Giving: You may be able to setup a Private Foundation and bundle your giving for one or more years before year end. Get one big tax deduction now and distribute funds to your favorite church or charities over several months or years if you like.
Take Tax Losses Now: If you have investments that have lost value, you may be eligible to write off the losses and reduce your tax liability. The limit for losses is $3,000 and any remainder may be carried forward towards future tax returns.
Delay IRA Distributions: Delay taking distributions from your IRA until January 1st, 2020 and defer taxes until next year.
HSA Contributions: Maximize your HAS contributions: $3,500 Individuals or $7,000 Family + Additional $1,000 if you are age 55+.
Lloyd Conley EA