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10 End-of-Year Tax Planning Tips for 2019
Another year is almost over. That means the holiday season and family gatherings - which leave little time to change things that could help your 2022 taxes. So before ringing in the New Year, here are some things you can do that will make filing your taxes easier and help you get the most out of your return.
First, take some time and go through all the records and paperwork you’ve been saving throughout the year. Separate them into categories such as:
The sooner you get organized, the earlier you can file your tax return, which can help prevent tax-related identity theft. It will also help your Tax Pro when you come to your appointment with all of your information already in good order.
Check tax withholding amounts
If taxpayers haven’t yet reviewed their tax withholdings and provided their employer with an updated W-4, they could be surprised when they file their taxes. If the withholdings are low, either submit an estimated payment now to cover the taxes or start saving money to pay taxes when filing. Be sure to make an changes to your withholdings now so they are correct for the next tax year.
Prepay spring tuition for college students before the end of the year. Tuition paid by December 31, for a session beginning before the end of March can be used to determine an education credit on this year's tax returns.
Gather Receipts if Self-Employed
The self-employed should gather receipts and income documentation for the year. The Qualified Business Income (QBI) deduction allows most small self-employed taxpayers to deduct 20% of business income for small business owners.
Taxpayers providing more than half the support for a parent or other relative may be able to claim the Credit for Other Dependents.
Standard or Itemized
After you get your paperwork organized, consider whether the standard deduction or itemized deductions are better for your tax purposes. The standard deduction is simpler, but itemizing your deductions may get you a larger refund depending on your circumstances. Consult with a Tax Pro before making a definite decision.
If you’ve been contributing regularly to a 401(k) or another employer-based retirement plan, you might want to contribute the maximum yearly amount allowed in order to reduce your taxable income. If you have an IRA, you actually have until April 18, 2023 to make 2022 IRA contributions.
Find Last Year's Tax Return
It is a great way to jump-start your tax preparation this year with a good map of what you did in the past. Can't find it? Lost it? Don't have it? No worries. It is nice to have but not a must-have. Come to Jackson Hewitt this year and next year, no worries. We will have all your records and history for whenever you might need them. Safe, secure and convenient for your needs.
Use Your Flexible Spending
If you have a Flexible Spending Account through your health plan, make the most of it before New Year’s Day. Because if you don’t use it, you will lose it. Some companies offer an extension through March to use the funds but don’t count on it being available after December 31. Spend remaining funds on end-of-year medical checkups, regularly-purchased medicine, eyeglasses and contacts, dental exams and work, or other health-related items.
Choose a Tax Pro
Face it, taxes are complicated. With state and federal taxes changing from year to year, you’ll want a Tax Pro who is up-to-date on the latest tax codes so you can claim all the deductions and credits you’re allowed. They have the knowledge, skills, and experience to help you have a Happy New (Tax) Year.
About the Author
Mark Steber is Senior Vice President and Chief Tax Information Officer for Jackson Hewitt. With over 30 years of experience, he oversees tax service delivery, quality assurance and tax law adherence. Mark is Jackson Hewitt’s national spokesperson and liaison to the Internal Revenue Service and other government authorities. He is a Certified Public Accountant (CPA), holds registrations in Alabama and Georgia, and is an expert on consumer income taxes including electronic tax and tax data protection.
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