PREPARE AHEAD FOR TAX SEASON WITH THESE LAST-MINUTE TIPS TO REDUCE YOUR DUES AS MUCH AS POSSIBLE
After the merriment of the holiday season comes one of the most dreaded times of the year: tax season. While filing and paying the proper taxes is a task that all working adults have gotten used to doing year in and year out, it’s still not an enjoyable one to do.
Fortunately, people still have something positive to look forward to during this time: tax deductions. Depending on factors like age, place of residence and marital status, one can easily save a significant amount of money and decrease what they owe. Here are some guaranteed and other potential ways people can save on their tax bills for the year that will soon end.
Of course, there are standard deductions that all qualifying filers are entitled to. There’s the one that married couples, who file together, get and it has been increased up to $24,400. Meanwhile, married people filing on their own can deduct up to $12,200 and household heads are entitled to up to $18,350, according to the Internal Revenue Service (IRS).
Additionally, parents can deduct $2,000 a year for the child tax credit and $500 for their dependents who aren’t their children. However, it’s worth noting that alimony payments are no longer considered as deductibles for post-Dec. 31, 2018 divorces.
Aside from the above, people can still hope for additional deductions because of a bill in Congress that’s looking to raise the limit on state and local property tax (SALT). The current limit is set at $10,000 and the bill is pushing to set it at $15,000 for individual persons and $30,000 for married couples.
Unfortunately, this benefit may not be applicable for people’s 2019 tax bill as there’s seems to be no time left in the year to pass it into law. Experts are still interested in seeing how the change in SALT will be like for the coming year.
MORTGAGE INTEREST DEDUCTIONS
Another way people can cut their tax bill is through mortgage interest deductions. This deductible is applicable for up to two homes with a mortgage debt limit of up to $750,000. However, housing debts incurred before Dec. 14, 2017 are ‘grandfathered’ under the old tax law.
People can hit two birds with one stone by choosing to make donations using their IRA and other retirement accounts tax-free. Those over the age of 70 and a half can directly send up to $100,000 to a charity of their choosing untaxed.
The amount will be reportedly seen as part of one’s required minimum distribution. Still, taxpayers, who donate, are required to have charity-issued acknowledgment letters.