2019 is winding down, and before you know it, you’ll be pulling together everything needed to file your federal income tax return for the year. Federal income tax returns for 2019 are due on or before April 15, 2020. But if you’re interested in potentially saving on taxes, you should plan now, before 2019 comes to an end. Talk to your tax professional about whether these considerations apply to you.
How you claim deductions affects the steps you can take to save. You have the option to either take the standard deduction (an amount set by law and adjusted for inflation) or itemize deductions. However, fewer people may benefit from the itemized deduction option due to changes in the tax law that took effect in 2018.
The standard deduction nearly doubled from 2017 to 2018. For 2019, the general standard deduction is $24,400 for married couples filing a joint return and $12,200 for single tax filers (Internal Revenue Service, 2019). At those dollar amounts, it may not benefit you to itemize your deductions, but thankfully there are still potential tax-saving steps you can take.
Steps to consider regardless of how you claim deductions
Here are potential tax-saving opportunities that may apply to you:Save more for retirement: One priority if you are still working and contributing to a workplace retirement plan is to maximize your contributions to that plan. Dollars contributed to the plan on a pre-tax basis reduce your taxable income, which reduces your tax bill.