What to check when planning for your tax?
All too often, taxpayers wait until after the close of the tax year to worry about their taxes and miss opportunities that could reduce their tax liability or financially assist them. Mid-year is the perfect time for tax planning. The following are some events that can affect your tax return; you may need to take steps to mitigate their impact and avoid unpleasant surprises after it is too late to address them.
See Relax Tax’s Tax Audit Assistance at relaxtax.com/audit
Here are some events that can trigger tax consequences. Did you (or are you going to):
❑ Get married, divorced, or become widowed?
❑ Change jobs or has your spouse started working?
❑ Have a substantial increase or decrease in income?
❑ Have a substantial gain from the sale of stocks or bonds?
❑ Buy or sell a rental?
❑ Start, acquire, or sell a business?
❑ Buy or sell a home?
❑ Retire this year?
❑ Reach age 72 this year?
❑ Refinance your home or take out a second home mortgage this year?
❑ Receive a substantial inheritance this year?
❑ Take advantage of tax-beneficial retirement savings?
❑ Make any significant equipment purchases for your business?
❑ Purchase a new business vehicle and dispose of the old one?
❑ Adequately document your cash and non-cash charitable contributions?
❑ Keep up with your self-employed estimated tax payments?
❑ Make any unplanned withdrawals from an IRA or pension plan?
❑ Add a solar electric system to your home or purchase an electric vehicle?
❑ Hire veterans’ or other individuals in your business that may qualify for the work opportunity tax credit?
❑ Trade in cryptocurrency?
❑ Defer employer payroll taxes in 2020?
❑ Incur expenses adopting a child?
❑ Start receiving Social Security benefits?
❑ Exercise an employee stock option?
❑ Start using a part of your home for business this year?
❑ Exchange real properties used in your trade or business or held for investment?
❑ Start a retirement plan in your self-employment business?
❑ Make gifts of over $15,000 to any one individual this year?
❑ Receive advance child tax credit payments?
Of course, these are not the only issues that have tax consequences.
See this related post from Candido Rodriguez: 7 Key Benefits of Financial Planning
What are the advantages of having a financial plan? It gives you more confidence, not only for the unforeseeable future but also gives you the peace of mind that if anything happens, you know what to do next.
If you anticipate or have already encountered any of the above events or conditions, it may be appropriate to consult with this office at 551-249-1040—preferably before the event—and definitely before the end of the year.
Do you need more information? You can reach out to Dennis Harabin at Relax Tax today!
Recommended Readings:
Why Is It Important To Have a Financial Plan?
Relocating? Tax & Non-Tax Things to Consider
Fall Tax Planning May Be Wise
Relocating? Tax & Non-Tax Things to Consider
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