Tax Tips, pt 1
Only two days left in the year, but still enough time to do some tax planning!
Here are some steps you can take today to possibly reduce the taxes owed for 2019 or increase your refund.
Keep all charitable receipts and organize your paperwork to make tax preparation easier.
Defer any remaining income unless you think it’ll move you into a higher tax bracket next year. Now if that’s possible, take the income and pay the tax while in a lower bracket.
75% of taxpayers take the standard deduction. It’s about $12,000 for singles and $24,000 if you’re married, filing jointly.
Now if accepted expenses exceed this amount, then certainly maximize deductions and itemize.
If you’re on the borderline, consider what’s called bunching. This means timing expenses in rotating years. You’ll itemize one year and take the standard deductions the next. It takes planning, but it can really pay off!
When itemizing, the donation of appreciated stock or property can increase your tax benefits. For a property owned for more than a year, you can deduct the market value on the date of the gift and avoid paying capital gains tax on the appreciation. Now that’s a double win!
Other expenses you can pre-pay this year are state income tax bills due January 15, a property tax due early next year or your medical bills.
Just remember, always be honest! “Whoever walks in integrity walks securely, but whoever takes crooked paths will be found out.” (Proverbs 10:9)
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