With less than two months left in the year, taxpayers have just enough time to…
With less than two months left in the year, taxpayers have just enough time to make financial moves to impact their taxes. Jackson Hewitt Tax Service informs taxpayers that they may have the ability to increase their refund or reduce the amount of taxes owed if they use these tips before 2019 ends.
Jackson Hewitt shares its top year-end tax tips:
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.
Bundling expenses will be helpful for those with itemized deductions. If itemizing this year, try squeezing in the last elective medical expense or paying mortgage payments before the end of the 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.
Taxpayers with a Flexible Spending Account (FSA) have until the end of the year to spend the remainder of their account.
Consider contributing the max amount to a 401(k) or similar retirement plan before December 31, 2019 and reduce taxable income for the year.
Taxpayers have until April 15, 2020 to make 2019 IRA contributions. They also have until April 15 to set up a new IRA and contribute for 2019. Those aged 70½ or older with a traditional IRA should take their annual required distribution to avoid a penalty.
Self-employed workers 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 can donate their gently used, unwanted items to a qualified charitable organization. Only donations to IRS-approved charities are deductible. Receipts for purchased items, or a record of the purchase price and fair-market-value at the time of donation, should be kept.
If you invest in or use crypto currency the IRS is looking for you to report the information on your tax return. Make sure you have your records for all transactions during the year.
Taxpayers providing more than half the support for a parent or other relative may be able to claim the Credit for Other Dependents.
Find out more at www.jacksonhewitt.com.