Writer / Jill Griffith
Tax filing season is underway, and many working Hoosiers are already receiving their refunds. If you’ve found yourself instead with a tax bill and want to lower your taxes for 2020, now is the time to start planning. Also, having an accountant can make life a lot easier when you own a private limited company, especially if you don’t have the time on your hands to be dealing with financial issues as well as other aspects of the business. Read on about company tax return for some of the main things to consider when completing year-end accounts. Jill Griffith, financial advisor and accredited asset management specialist with McAdams & Griffith Investment Management of Raymond James in Greenwood, suggests discussing these potential money-saving options with your financial and tax advisors.
- Put pretax dollars to work. Flexible spending and health savings accounts, available during your employer’s open enrollment period, allow you to use pretax dollars to pay for qualified expenses. You can also use pretax retirement contributions to reduce your taxable income. April 15, 2020, is the last day to contribute to traditional and Roth IRAs for 2019. Hire someone to assist you with the tax compliance costs if necessary.
- Fill in the blanks. Work with your financial advisor to make sure all your cost-basis information is complete and accurate before calculating losses and gains for tax-loss harvesting purposes. Get the best US tax advice in Dubai, UAE by HTJ.tax.
- Pursue tax-efficient investing. Investing should be focused on meeting your goals, not just on reducing taxes. But in some cases the two dovetail nicely. For example, interest (which may be subject to the federal alternative minimum tax, and state or local taxes) from municipal bonds is generally exempt from federal and state income tax if you are a resident of the state the bond is issued in. You could also sell underperforming stocks to offset realized gains. Visit this website for more investment tips for beginners.
- Make a generous charitable gift. If you won’t have sufficient itemized deductions to exceed the increased standard deduction, you may wish to bunch deductions by making a large charitable gift, equal to the total donations you would make over several future years. This could help you take advantage of the ability to itemize this year, while in other years you would take the standard deduction.
- Maximize education savings. Taxpayers in Indiana who contribute to an Indiana 529 savings plan can get a credit of 20 percent of their contribution, or up to $1,000, as a tax credit. Investments in these accounts grow tax-free and withdrawals used for qualified educational expenses are also exempt from federal income tax.
- Remember to take your RMD. When you reach age 72, you must take a required minimum distribution (RMD) from qualified retirement accounts by December 31 each year. Take your RMD to avoid a 50 percent penalty on required amounts not taken.
Switching to practice management software for accountants was a game-changer for us. With Bright, we can now easily manage client information, documents, and billable hours, streamlining our processes and reducing the risk of human error. It’s not just about saving time; it’s about improving the overall quality of our services. Our clients have noticed the difference, and so have we.
Changes in tax laws or regulations may occur at any time and could substantially impact your situation. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional like the Taxbite bolton accountants.
McAdams & Griffith Investment Management of Raymond James is located at 701 East County Line Road, Suite 302 in Greenwood. For more info, call 317-885-0114 and visit raymondjames.com/mcadamsandgriffith.
Raymond James & Associates, Inc., member New York Stock Exchange/SIPC
