13 Dec How can I save on my 2019 tax bill?
Q. I’m looking for ways to lower my tax bill for 2019. I haven’t really given to charity, but I have fully funded my 401(k) and IRA. What other things can I do?
— Taxed enough
A. Congrats on fully funding your 401(k) and IRA.
Changes in the tax law may limit your options for additional tax savings.
You mentioned giving to charity. If you’re charitably inclined, that is a good place to start, said Steven Gallo, a certified public accountant and personal financial specialist with U.S. Financial Services in Fairfield.
“This is one of the few deductions where the requirements have not been changed,” he said. “Depending on what type of charity you choose, your contributions are fully deductible up to either 30% or 50% of your adjusted gross income.”
This assumes you already itemize your tax return, he said.
If you are itemizing and anticipate owing additional state income taxes, you can make an estimated payment before Dec. 31.
“However, keep in mind that you are limited to $10,000 in state income taxes and real estate taxes combined,” Gallo said. “If you have already reached that level for the year, prepaying will not help you.”
You can also look at your investment portfolio. If you have capital gain income already realized for 2019, look for any unrealized losses. Harvesting those losses can help reduce your capital gain taxes for this year, Gallo said.
If you are self-employed, an option is to defer income to next year or accelerate expenses to this year — providing it makes good business sense, he said.
Email your questions to moc.p1582534941leHye1582534941noMJN1582534941@ksA1582534941.
This story was originally published on Dec. 13, 2019.
NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.