Tips to Still Reduce Your 2019 Tax Bill

Tax day is just around the corner. Not sure if that is a good or bad thing. Regardless, it isn’t too late to try and lower your 2019 tax bill.  Below are some quick highlights via a good CNBC article of things you can still do or records you need to pull out from 19 to lower that tax bill. Again, it isn’t what you make. It’s what you keep!

• The first two suggestions are active ways you can lower your 2019 tax bill. First is the most popular of the usual suspects. It is contributing to your deductible IRA. The amount for 19 is $6,000 and then another $1,000 if you reached 50 last year. Your deadline can be as late as April 15, 2020.

• Next is it is not too late to fund your HSA from last year. The deadline is the same here. Remember, the contribution amounts to an HSA for 2019 are $3,550 for an individual and $7,100 for a family.

• The rest of these ideas are all related to costs and bills you may have incurred last year. So, hopefully you kept good records.  The first is if you have any student loans you need to make sure you received a Form 1098-E. You may be able to reduce your taxes by up to $2,500 or the actual student loan interest paid, whichever is less.

• Speaking of interest, if you are itemizing and you paid mortgage insurance you may be able to deduct those costs too.

• Now, if you have children under age 13 (pretty sure if you were born on leap day it does not count) you may be able to deduct child care expenses. The numbers are up to $1,050 for one child and $2,100 for two or more.

• Jumping back to higher-ed expenses, up to $4,000 may be deductible. We’re talking the Lifetime Learning Credit or the American Opportunity Tax Credit here.

• Maybe you had a bunch of medical expenses last year. Well, if the total is more than 7.5% of your adjusted gross income (AGI) you may be able to deduct some of those medical costs.

• Finally, small business owners have a few breaks coming their way.  They include expenses for healthcare, retirement savings, business use of your car and home, and rent.  

As always, please discuss these concepts with your CPA. The important thing to remember is it both not too late to reduce your tax bill but it is also critical to keep receipts of your expenses. Because we’ve talked about it before – no reason to pay what you owe, but no reason to tip Uncle Sam either!