10 Tax Tips
10 Tax tips that could save you money
More than ever this year due to Coronavirus Individual Tax return filers and Small Business owners are looking for ways to minimize their tax liability.
Consider these ideas that could potentially reduce your tax liability or maximize your refund:
Tax Tip #1:
Health Savings Account (HSA) for the WIN!! There are ways to utilize your HSA money for your day to day medicines like first aid, vitamins, OTC drugs, and feminine hygiene products. Review your online orders for this past year to get the most from your HSA.
Tax Tip #2
Charity begins at home! Did you know everyone can deduct $300 of charitable giving in 2020? Gather your receipts from all the places you have donated this year like churches, Charities and non-profits. Also, now is a good time to organize your home and donate those extra clothes or housewares to the needy. Be sure you have a detailed list and receipts for donating your items to charity.
Tax Tip #3
There are tax breaks for your state taxes, when you contribute to your state’s 529 Gift plan, then use the money for not only college, but also for K-12 private school tuition AND paying off your student loans.
Tax Tip #4
College students, gather your receipts for Tuition, any fees, books, unlock codes, lab gear, office supplies, and anything else required for class. If you bought a computer, software, or internet access, find those payments too. Get these to your parents (or their tax pro) with your 1098T.
Tax Tip #5
If you took money or planning to take out before Dec 31, out of retirement in 2020, you have the option to pay it back over 3 years or pay the taxes over 3 years. 2020 has taken away most of the withdrawal penalties, where you only pay the regular income tax on the withdrawal. Check with your tax pro to plan what’s best for your situation.
Tax Tip #6
Pandemic: If you got unemployment or PUA, it is taxable income. Make plans to be ready to pay taxes on that income. It can raise your taxes and reduce your Earned Income Credit, so check in with your accountant today to be prepared.
Tax Tip #7
Are you Self-employed or do you own a business, get a 1099, or work gigs of any kind, you need to do an income checkup NOW while there is still time to make corrections? Send your information to your tax pro TODAY. You can also do it yourself free at https://irs.gov/paycheck-checkup .
Tax Tip #8
Do you sell things? Do you sell Food? Drinks? If so, you need to take an inventory at the end of the year. It’s not optional. Set a date, order pizza, and do it. If you tossed inventory due to being closed for Covid, note what you tossed to your accountant.
Tax Tip # 9
Do you have contract workers? Get their tax info like SSN, and address now, to send their 1099’s today. Do not wait until January. Request their info by giving them a form W9. If you plan on deducting what you pay them as a business expense you will need to issue them a 1099 in January.
Tax Tip #10
Self-employed? Did you miss work because you were sick or had to care for family? You can finally get a credit for that lost time. Gather your calendar now to show the days you missed. This is days you were unable to work, so ineligible for unemployment. (no double dipping)
For more information Schedule an appointment with our Tax experts.
Share and Like our Facebook page with your friends : @LakelineTax