Year-end tax tips

There are so many things you can do to lower your tax liability or maximize your tax refund by the end of the year. Here are a few year-end tax tips for you to consider:

 1.     Maximize your retirement account contributions: If not done yet, make sure you contribute as much as you can, not to exceed the contribution limits, to your retirement plans. You might be able to deduct your qualified requirement contributions from your taxable income.

2.     Take your Required Minimum Retirement Distributions (RMDs): You must take the RMD by December 31 (exceptions apply). If you don’t take your RMDs when you are supposed to, the amount not withdrawn is taxed at 50%. You must take your first required minimum distribution for the year in which you turn 72 (70 ½ if you reach 70 ½ before January 1, 2020).

3.     Check your flexible spending accounts: Make sure you check to see if you are allowed by your employer to use the remainder of your flex account in the following months (new year). If not, make sure to visit your doctor, dentist, or get your prescriptions before the year ends so you don’t lose your remaining funds. These accounts are tax-free.

4.     If you expect to itemize personal expenses: It would be very helpful to make your last-minute donations to qualified organizations if you expect to itemize your personal expenses. Make sure to keep all your receipts.

Also, if you are planning on visiting a doctor, ophthalmologist, or dentist and have out of pocket medical expenses make sure you go before December 31st so you can deduct these expenses. Keep all your receipts as well.

5.     For Self-employed individuals or business owners: You can defer receiving some of your income to the beginning of the new year, this way your taxes will be lower. You can mail out your invoices by the end of the year as an option.

Would you like to know more about these topics? Get in touch with us! Let us fix your tax problems! You can call/text us at (347) 720-2224, or email us your concerns at contact@ztaxllc.com. Follow us on social media.