By: Sofia P. Hinojosa, CPA
With the hustle and bustle of the holidays, it’s easy to forget about tax deadlines on the horizon. With these tips, get ahead of your planning before time runs out.
Check Your Charities. Since the standard deduction has been increased, you may no longer receive a tax benefit for making a contribution to your favorite charity. The deduction for single filers increased from $6,350 in 2017 to $12,000 in 2018; for married couples filing jointly, it’s moved from $12,700 to $24,000. Rather than making small yearly contributions, you can double-up and make a larger contribution this year (and every other year moving forward) to make sure you get over these limits and take full advantage of your deductions.
Make Certain of Medical Expenses. In 2018, you still can take advantage of deducting medical expenses in excess of 7.5% of AGI, rather than 10%. Therefore, you may want to consider paying all your medical expenses by 12/31, rather than waiting until January 2019.
Balance Your Bills. For business owners, it’s always a good idea to get bills paid by year-end to take advantage of the deduction and decrease your taxable income. At the same time, you may want to postpone collecting on any contracts drawn in late December, so you can defer that income until 2019.
Get Your Affairs in Order. Have you considered a living trust, last will and/or medical directive? These are all important topics to discuss with family, and to have in place in case tragedy were to suddenly strike. Talk to your attorney and/or CPA about your needs and how they can help create these documents for you now to protect your assets in the future.
Make a Business Plan. If you’re a business owner, have you thought about what will happen to your business when you’re gone? Will your spouse or children inherit it? If so, are they trained to take over for you? Or, will you sell it and leave the proceeds to your family, or your favorite charity?
Settle Your Student Loans. If you have outstanding student loans and have not maxed out on the $2,500 above the line deduction for interest paid, consider using some of your Christmas cash to make a final payment before the year is over.
To start planning your tax strategy for 2019 and beyond, contact us today!
For more information call Osborne Rincon CPAs at 760-777-9805