November is a wonderful start for holiday season with several traditions to match: pumpkin-spiced everything, no-shave November (apologies to those spouses affected), watching football and of course … Thanksgiving.
Sorry to poke my accountant’s green shades into all those festivities, but it also happens to be a perfect time to strategize. (Add that to your new November “traditions” list.) We’re going to look at five key tax moves you can make it in November. Before we know it, spring will bloom and you’ll be glad you read this.
But just reading/talking about these moves is one thing — acting on them is what will save you money in the future.
Now THAT’S a tradition worth celebrating no matter the month.
Please reach out to me so that we can start implementing some of these strategies ASAP. You bring the latté; I’ll bring the game plan.
A Trusted Dallas/Fort Worth Professional’s Thoughts For Your 2019 Taxes
“Let us remember that, as much has been given us, much will be expected from us, and that true homage comes from the heart as well as from the lips, and shows itself in deeds.” -Theodore Roosevelt
In Q4, we often strategize for our 2019 taxes. But this is also a vital time to take 2020 into consideration. Don’t wait until January 1 to make some sort of new year tax resolution. We all know how those end up most of the time.
Instead, let’s get a jump start on this year and next. The first step is to determine your income thus far in 2019, then forecast what that number will be by year’s end. Once you have that number, we can decide what 2020 will look like (More? Less? The same?) — and strategize accordingly. Doing this allows us to defer and/or accelerate write-offs. I’ll help you get this process started!
Itemized vs. Standard Deductions
The two-year strategy also allows you the option to itemize or use larger standard deduction amounts. The Tax Cuts and Jobs Act (TCJA) 2019 standard deduction is $12,200 for single filers and twice that amount if filing as a married couple.
There are a few more strategies to look at when it comes to deductions. And we’re best served sitting down together to discuss your unique tax situation.
Focus on Form W-4
The TCJA certainly shifted tax rates and income amounts taxed beneath those rates. Unfortunately, many were not ready for the refund they received last spring because they were unaware of rate changes.
In an effort to adjust your expectations, this IRS withholding calculator will take your paycheck and provide a more accurate forecast for the spring. This is a crucial move in November because we can get a sense of what paycheck changes need to happen now — there’s still time to spread paychecks out moving forward.
Invest in Your Health
Many Dallas/Fort Worth companies offer a medical flexible spending account (FSA), and if you’re one of those lucky individuals it’s time to schedule that doctor appointment. Many FSA accounts require that the money saved is spent by December 31, so don’t hold onto that cash too long.
‘Tis the Giving Season
Naturally, November and December present a big push for nonprofit + charitable giving opportunities. If you aren’t factoring how these giving strategies could affect your tax strategy, then we must meet to discuss why it’s so important. However, if taxes are the only reason you’re giving to a charity, I might suggest you rethink “why” you give.
If there are no organizations on your radar, do some research in your area. It’s vital to support Dallas/Fort Worth local businesses, and therefore communities, with the money that’s been entrusted to you.
And there you have it! There are certainly more November tax strategies, but these are a good start. Please let me know if you have any questions. I’d be more than happy to start a conversation.
Until then, may we prepare our stomachs for the Thanksgiving feast. And more than good food and drink, may we look for ways we can serve others in need — so that we can all truly give “thanks” this holiday season.
Timothy A. Phillips, CPA, PC