The following guest post from top selling author, attorney, tax and small business expert, Barbara Weltman is extremely timely for people like myself who put off taxes until the last minute. Here Barbara shares her best last minute tips for tax day.
In today’s economic environment, every financial milestone is an important one. It’s critical that small business owners have the right tools and know-how to properly manage their taxes year-round so they’re not dealing with undue stress on the days leading up to April 15th. The right solutions can help small business owners efficiently and easily manage their business’s finances and employee tax withholdings, so they can spend more time running their business. With the April 15th deadline looming, here are some things you can still do to reduce your tax bill and make the filing process a little easier.
5 Very Last Minute Tax Tips
1. Contribute to a deductible IRA or HSA. Yes, even though 2019 is over, you can put money into an IRA or health savings account (HSA) for the 2019 year (assuming you’re eligible for these accounts) and deduct the contributions on your 2019 return. You must act by April 15th. IRA contribution limits for 2008: $5,000, or $6,000 for those 50 or older on December 31, 2008. HSA contribution limits for 2008 depend on whether you have self-only coverage under a high-deductible health plan, or family coverage; those 55 or older on December 31, 2019, can add another $900.
2. Double check for carryovers. You may have forgotten tax breaks from your 2007 tax return that can be used to cut your 2008 tax bill. Look for capital loss carryovers (reported on last year’s Schedule D of Form 1040), which can be used to offset any capital gains in 2008 if you had them, plus up to $3,000 of ordinary income. Other carryover possibilities: home office deductions, charitable contributions, and net operating losses.
3. Settle up your tax bill. If you owe a small amount, pay it by check or charge it to a major credit card. While the IRS doesn’t charge a fee for paying by credit card, there’s a 2.49% convenience fee imposed by the credit card processor, so if you charge $1,000 in taxes, you’ll pay $24.90 to the processor—a hefty cost for racking up frequent flyer miles. Larger bill? If you can’t pay in full, ask the IRS for an instalment agreement by filing Form 9564 This usually allows you to pay what you owe, plus interest, over the next three years.
4. File electronically. If you wait until the last minute, avoid lines at the Post Office, as well as save paper and postage, by using e-File to submit your return. Electronic filing also ensures that your return is free from math errors and has all the required information (e.g., Social Security numbers) for processing; you’ll receive an electronic acknowledgment from the IRS that the return has been accepted for filing. You may even be eligible to use … Read More...