22 Nov 4 Last-Minute Tax Deductions You Need to Take Before 2020!
There’s a little over a month before the end of the year (at the time of writing this post), and that means that your time for getting any last-minute tax deductions for 2019 is quickly running out.
Most people are more concerned with family parties and holiday visits this time of year, but we want you to save money too. With all of that spending on gifts, it’d be nice to get a bigger tax refund at the start of 2020, right?
If you want to lower your tax bill this year, then here are 4 last-minute tax deductions you need to take before 2020.
1: Vehicle Deduction
We talked about this in a blog post a few weeks ago, so we won’t spend too much time on it here. In a nutshell, purchasing a new vehicle for your business can net you a hefty tax deduction, even if it’s a used one. This is also a good reminder to keep good records of mileage, that way you can get an extra deduction too.
2: Hold Off Billing
Most business owners like to bill quickly. The sooner you get paid for your hard work, the better, right? However, with taxes in mind, this may not be the best strategy. For example, you could wait until January to send bills for your work in December. That’s extra money you get in your pocket at the start of 2020, and you won’t have to worry about the taxes on it. Instead, that money will be reported on your 2020 return. It’s a nice way to reduce your tax bill in a pinch.
3: Pay Your Rent in Advance
If you rent your place of business, you can use this to your advantage. Before December 31, 2019, you can write a check for 2020’s entire rent and send it to your landlord. That provides a meaty last-minute tax deduction for 2019 and ensures that your rent for next year is already paid for. It’s important to let your landlord know ahead of time that this is your plan, though, or you could complicate the process. Furthermore, make sure that you have some way to prove that you sent the check before the 31st. The IRS may try to call you out for a big deduction at the last minute.
4: Charitable Contributions
Itemized deductions don’t benefit individual taxpayers since the Tax Cuts and Jobs Act, but they can still benefit those who contribute enough. If you donate more than the standard deduction amount ($12,200 for single, $24,400 for married filing joint), then your overall deduction will be greater. Furthermore, those over 70 1/2 years old can send distributions directly from their IRA to a charity, which lowers their taxable income. If you have the means, making charitable contributions before the end of the year can have great effects on your tax bill.
Have more questions about the last-minute tax deductions you can take? Call us at 614-524-4888 to schedule an appointment or message us on Facebook!