With Thanksgiving upon us, and the entire nation digging deep into their individual lives for the many things they have to be grateful for, being on the good side of the IRS might make it to your gratitude list this year. It is also the season to start thinking about how you can save on taxes when you file before next April’s deadline. If you owe the IRS no time like the present to put a stop to the stress and get out from under the IRS! We offer a free consultation to stop the IRS!
Here are a couple of tax related items to remember with the new tax laws to consider before the holidays sweep in to distract you.
Not as much fun as some other things you’d rather think about, I’m sure. But, if you can save even a little on your taxes that could make the holiday season a little brighter.
The standard deductions have nearly doubled which might be a real benefit whether you are a single or joint filer.
For singles the standard deduction is now $12,000 and for joint filers it is $24,000. For some taxpayers, it might be beneficial to take the standard deduction every other year while itemizing on the off years. It is projected that many more taxpayers will be better off with the standard rather than the itemized deduction.
If however, you regularly claimed itemized deductions, you may now decide to bunch those deductions into one year and claim the standard deduction in the alternating year. Just something to think about in advance.
One itemized deduction that is easily bunched is charitable contributions.
You can still give on an annual basis to your favorite charities by making the donations in January and December of one year while skipping the following year or through the use of donor-advised funds, where the donation is claimed in one year while the distributions to charities can be spread over several years.
With respect to the $10,000 limit on the state and local tax deduction, taxpayers with real estate taxes should consider whether it is possible to allocate any real estate taxes to a business tax return. While some higher-tax states have adopted laws to help taxpayers preserve their deductions through charitable contributions to state charities or through payroll deductions, the IRS is attacking those approaches and it is not clear that such approaches will hold up.
So, just a few things to consider and decide which way you’ll want to go when tax time comes around. In the meantime, may you and your loved ones have a joyful and loving Thanksgiving.