Tuesday Tax Tips
Did you know the IRS issued more than 111.8 million refunds, averaging over $2800 each, for the 2018 tax year? There are still ways you can boost your 2019 tax year refund.
- Boost Retirement contributions. You can contribute to an IRS until the April 15 tax deadline and it will still count toward the 2019 tax year! By contributing toward your IRA, you reduce your taxable income and the money is still yours. You are saving for your own retirement.
- Fund a health savings account (HSA). IF you are in a high deductible health plan, putting funds into a HSA reduces your taxable income, the money is still for you in case of healthcare needs. How much? You can contribute up to $3,500 if you’re single, $7,000 if married, and an extra $1,000 if you are 55 or older. What I love about the HSA is that your tax advantages are stacked. The contributions go in pretax; you can withdraw it tax free if for qualified medical expenses, and if you don’t need it for medical, you can invest the unused funds in an IRA or 401K to keep the gains tax deferred.
- Use all applicable tax credits. These are great because they reduce your tax bill directly dollar for dollar. If you use day care or childcare services, you may qualify for the child and dependent care tax credit. Families can deduct up to $2,000 from their federal income taxes for each child under 17 years old. If you have low or moderate income, the earned income tax credit can offer much needed tax bill relief.
- Don’t forget to include all the charitable donations you made to eligible agencies.
- Use the Qualified Business Income deduction if it fits. Owners of pass through entities may deduct up to 20% of the qualified business income. That is a nice chunk it if fits you.
- Look for all the deductions available to you. the Tax Cuts and Jobs Act changed what can be itemized but offered other reliefs. Talk to your tax preparer or visit AcctServices.org to find what can help you reduce your tax bill.