As 2019 Comes to a Close, Don’t Forget to Maximize Those Tax Benefits
It’s the holiday season, and we know that there’s a lot on your plate right now. But aside from the holiday shopping, dinner planning, and room and board arrangments, there’s one more thing you absolutely must do before you begin the next year.
Visit with your McAllen CPA at Murray & Kirchner LLC before 2019 ends to see if you qualify for specific tax breaks and investment opportunities, and maximize your tax benefits.
Below are a few recommendations we compiled so that you can gather the appropriate documentation and stop by our office before the end of 2019.
1. Let Us Review Your Investment Portfolio
Having a McAllen CPA review your investment portfolio before the end of the year can inspire you to take action that you may not have thought about before. In fact, selling any investments that are at a loss is a good way to offset capital gains, and our experienced CPAs can help you achieve that before the end of the year.
Also, if your investments are in a gain position and your taxable income is below applicable thresholds, you may be able to take advantage of a 0 percent long-term capital gains tax rate ($78,750 if you’re married and filing jointly).
Visit your experienced McAllen CPAs before December 31st to see what would be applicable in your particular circumstance.
2. Making Charitable Contributions During the Season of Giving
If you are making a few charitable contributions during the holiday season, it would be beneficial for you to take advantage of itemized deductions. While this gift of giving can put a smile on the receiver’s face, it’s worth mentioning that higher standard deductions ($24,400 for joint, $12,200 for single) make it more difficult for many individuals to itemize their deductions.
If you are nearly able to use itemized deductions, it may be in your best interest to consider a bunching strategy. In short, a bunching strategy requires that you pay two year’s worth of deductible costs at the end of this year, allowing you to itemize them on your 2019 tax return and possibly qualify for tax breaks. When the 2020 tax season comes around here after the holiday season, you may be able to take the standard deduction.
This, however, is a bare-minimum explanation of the strategy, and depending on your particular circumstances, your personalized strategy may differ. Visit our McAllen CPAs at Murray & Kirchner LLC to see what kind of deductions you can bunch together according to your financial circumstances today.
3. Don’t Forget About Your Retirement Accounts
There are a few things to keep in mind for those of us that have Traditional IRAs, Roth IRAs, or 401ks before 2019 ends:
- Deductible contributions to your Traditional IRAs and Roth IRAs ultimately phase out if covered by your employer’s plan.
- Married couples that file jointly phase out in the neighborhood of $103,000 to $123,000.
- With employer-sponsored plans, you’ll need to make the maximum pre-tax contributions before December 31st.
- Up to $19,000 ($25,000 if you’re 50 or older) can be tax-deferred for your 401k.
- $13,000 ($16,000 for 50 and up) can be deferred in Simple Retirement accounts.
For those able to continue contributing to their Traditional or Roth IRAs, a maximum contribution of $6,000 ($7,000 for those ages 50 and older) should be submitted by April 15, 2020, and for our clients age 70 ½ or older, you should be sure to take the required minimum distributions from your IRA or 401k plans before 2020 to dodge any sort of penalty.
4. Business-Owners, You Can Benefit Too
The end of the year can also significantly help out our business-owning friends as well. In essence, don’t forget to defer income and accelerate ductions wherever you can:
- Deductible purchases can be made on business credit cards before the end of 2019 to deduct currently, even if the credit card bill isn’t due until 2020.
- Buy business property now, and purchases the furniture, machinery, and equipment your business needs before the end of the year. It can be deducted in full in 2019 by taking advantage of an expanded 100 percent bonus depreciation for new or used assets.
- Consider remodeling or making improvements to your business building’s interior so that it can be 100 percent deducted in the year placed in service. Enlargement or construction of an internal structural framework may not be applicable, however, so speak with our trustworthy McAllen CPAs to see what would be applicable in your particular case.
Don’t Just Spend Some Time With the Family This Holiday Season. Visit Your McAllen CPAs at Murray & Kirchner LLC Today!
With a little help from our certified public accountants, you can maximize your tax benefits for the upcoming year. Your McAllen accountant will be able to help you get your financial circumstances in check, leaving you with one less thing to worry about as another year comes to a close.