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
The withholding tables changed after the new tax law went into effect in 2018. 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. Update 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, 2019 for a session beginning before the end of March 2020 can be used to determine an education credit on 2019 tax returns.
Gather Receipts if Self-Employed
The self-employed should gather receipts and income documentation for the year. A new 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 15, 2020 to make 2019 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.