By Robyn A. Friedman
City & Shore Magazine
April 15 is almost here, and that means the time for procrastinating is almost over. It’s time to crank out that return (or visit your accountant) and face the music.
But, as savvy taxpayers know, even though Tax Day is almost here, there’s still plenty you can do to lower your 2019 tax bill.
“It’s still not too late to save money on your 2019 tax bill – the window of opportunity to take advantage of certain tax and financial planning strategies is still open,” says Michael Landsberg, a spokesman for the Association of International Certified Professional Accountants. “By not taking advantage of various tax planning strategies, you could be leaving money on the table every year that could have gone toward your children’s education, family healthcare savings or retirement.”
Here are five tips from the experts on how to reduce your 2019 tax bill, even this late in the game.
- Review your filing status. Jeffrey M. Mutnik, a CPA with Berkowitz Pollack Brant in Fort Lauderdale, says that life events in 2019 may affect the filing status you claim on your 2019 return. For example, if you got married last year, your filing status may change from single to married filing jointly, married filing separately or head of household – and each will affect the taxes you owe. Similarly, the birth or adoption of a child during 2019 will affect the tax credits and deductions you may be entitled to receive.
- Max out retirement plans. According to Mutnik, taxpayers have until April 15, 2020 to make tax-deductible contributions of up to $6,000 to their traditional IRAs for 2019. The limit for those 50 and up is $7,000. Similarly, self-employed taxpayers have until April 15, 2020 to make 2019 contributions to their solo 401(k) plans.
- Don’t forget Health Savings Accounts. One way to lower your taxes is to put the maximum allowed in your HSA (generally $3,500 for individual coverage or $7,000 for a family) even if you haven’t reached that dollar amount yet through your payroll deductions. You have until the April tax filing deadline to make a direct deposit to your HSA from your checking account – and then deduct the deposit on your tax return.
- Start saving early for education. Contribute to an existing 529 education plan, or set up a new one. Although contributions are not eligible for a federal income tax deduction, many states offer state income tax deductions, so you snowbirds who aren’t Florida residents may benefit. Note: Check with your state. Although most states have a deadline of Dec. 31, 2019 for a state tax deduction in 2019, for a few states, the deadline is April 15, 2020.
- Don’t wait. Get your tax return prepared early. If you’re entitled to a refund, file early to get your money sooner. If you owe a balance on your 2019 taxes, you’ll have more time to put the cash together by April 15 to pay the IRS when the return is filed.