Federal tax laws are continually changing, and it’s becoming harder to optimize your tax return. While recent tax changes have eliminated some of the breaks and deductions available to taxpayers, there are still ways you can legally reduce your tax obligation. In this article, we’ll discuss five tips for lowering your 2019 tax bill and how S.H. Block Tax Services can help.
If you’re married, filing jointly typically lowers your overall tax liability and qualifies you for various credits and deductions. However, there are also times when filing separately can result in a lower tax bill.
For example, if you or your spouse had significant out-of-pocket medical expenses, filing separately may be a good idea. Under the 2019 IRS rules, you can only deduct these expenses if they exceed 10% of your adjusted gross income. When you file separately, the percentage is calculated on only one income and not your total, joint income.
Many retirement accounts and employer-sponsored benefit plans let you contribute or pay premiums with pre-tax dollars, reducing your taxable income. Examples include:
RELATED: S.H. Block Tax Services Can Help You Manage Your Withholdings and any Unexpected Taxes Owed
Whether you have a 7-year-old or an 87-year-old dependent, there are often tax breaks and credits available to decrease your taxes. Any money that goes towards child or dependent care may be tax-deductible. This includes nursing staff who assist you in taking care of an elderly parent while you’re at work or the cost of sending your child to daycare every day. Any expenses that result from your having to hire someone to help you care for a dependent while you are at work may qualify.
While it’s harder to exceed the standard deduction today, many people still can use tax credits and deductions to their benefit. Notably, tax credits are available whether you use the standard deduction or itemize your return.
One of the best ways to decrease the total amount you end up paying on your taxes is by filing and making your payments on time. Late filing can add up to 25% of your unpaid taxes to your total amount owed. That’s typically around 5% each part of a month until you file. Likewise, the failure-to-pay fee works the same way, but is only 0.5% each month. While this may not seem like much, these penalties can add up quickly.
However, there are also ways to minimize or avoid these penalties; if you have questions, contact our office.
RELATED: Two Truths and a Lie: Facts and Fictions on Paying Taxes and Filing Late
At S.H. Block Tax Services, our tax experts help clients determine their legal tax options and negotiate with the IRS to resolve tax issues. If you have any questions about your eligibility for any of the above suggestions, we’re here to help.
Call us today at (410) 872-8376 or complete this brief online form to schedule your free, no-obligation consultation.
The content provided here is for informational purposes only and should not be construed as legal advice on any subject.
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