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Here are seven quick tips to help you prepare for tax time 2020.
GET PREPARED THROUGHOUT THIS YEAR FOR NEXT YEAR’S TAXES
1) Did you end up grumpy this year because you couldn’t find any of the receipts that you needed? I’ve been there and done that and lost the deductions.
Nowadays there are far fewer deductions available so the ones that do exist are very precious. How can you make sure you have those receipts? Use a large manila envelope labeled Taxes 2019 for the paper receipts and a virtual (on your computer) file also labeled Taxes 2019.
Every time you receive a possibly useful receipt, place it in the appropriate place. The envelope can be tacked to a wall or taped to a file cabinet to keep it available all the time.
2) Do you have a small business and need to make Quarterly Estimated Tax Payments? Payments for tax year 2019 are due every quarter on these dates: January 15, 2019 (fourth and final estimated quarterly tax payment for the previous tax year, 2018) April 15, 2019. June 17, 2019.
It might be a good idea, if you’re the forgetful type, to set alerts on your computer for ten days or so before each of the due dates.
3) If you have to pay in this year, consider raising your withholding for 2019, so that 2020 is covered by your withheld funds and you don’t have to pay in more.
4) Because the standard deductions are almost doubled, don’t invest in a house or other live-in real estate and expect a large deduction from the mortgage interest, without checking with your tax expert. It might not happen.
5) If you have an IRA, make plans to maximize your contributions this year, as always, to improve your tax situation.
6) If you want to or feel you will be able to deduct things such as mileage on a vehicle or partial use of a phone, set up your mileage or use logs now. You will need them to justify the deductions next tax season.
7) Are you one of those people who plans to file early every year, only to discover on April 14th that you forgot?!? Or is my friend, for whom I’m asking, the only one?
Regardless, to save yourself some last-minute heartburn, set computer alerts for several days between January first and April Doomsday. Then try to pay attention (Ahem! Friend!)!
Hopefully, these seven quick little tips will help you have a better tax experience at the end of 2019. And don’t forget to file for 2018 taxes!