Your W-2s, 1099s, and K-1s are arriving in your mailbox right about now and you're stuffing them in shoebox - thinking there's no time like tomorrow when it comes to working on your 1040.
Well, truth be told, there's no time like today do work on your taxes.
Robert Keebler, a partner with Keebler & Associates in Green Bay and co-author of The Top 40 Tax Planning Opportunities for 2019 says CPAs who do mostly individual tax returns are slow right now. So, if you have all your tax documents take advantage of your CPAs free time.
The Tax Cuts and Jobs Act of 2017 (TCJA) brought about plenty of individual tax changes.
Here are 7 things you need to know:
Bunch charitable contributions
The TCJA doubled the standard deduction to $12,000 for single taxpayers and $24,000 for married filing jointly. That along with changes that limit or repeal many itemized deductions means that 90% of will taxpayers will claim the standard deduction on their 2018 tax return.
Keebler was quick to note that taxpayers should also discuss with their tax preparer the possibility of itemizing every other year, using a technique called bunching.
Can you use Section 199A
Retirees that still have an interest in a closely-held business should also talk with their tax preparer about the IRC section 199A deduction or the deduction for qualified business income, said Keebler. That's the new 20-percent deduction for pass-through businesses that was created by the TCJA. Taxpayers should make sure to take advantage of that if able, he said.
Contribute to your retirement accounts
Taxpayers can also reduce their 2018 tax bill is by contributing - if they qualify - to contribute money to a retirement plan, such as an IRA and SEP IRA. "Some people will have a big benefit from trying to take advantage of pension plan deductions," Keebler said.
Beware of provisional income calculation
Full retirement age taxpayers who were investing in tax-free municipal bonds and who just started collecting Social Security last year might be in for a surprise when filling out their 2018 tax return. We'll give you an example in our podcast.
Move to a low SALT state
Under TCJA, taxpayers can deduct only $10,000 in combined state and local income and real property (SALT) taxes.
Your five-years-away-from retirement plan
What's the best thing you can do to lower your future tax bills if you're five years away from retirement? Analyze when to take Social Security. "The sooner you know that the sooner you and your CPA can start doing pre-retirement tax planning. How do you position your wealth?"