As 2019 comes to a close, so does the tax year. With a month left in the year, there are still some moves you can make to decrease your tax liability come spring.
You will owe taxes on the income you receive in 2019, though in many cases, it might be possible to put off income until after the New Year. Even if you earned income in 2019, you will not pay taxes on it this year if you do not receive the funds until 2020. Deferring year-end bonuses, commissions, or other earnings until January can decrease your liability for 2019.
As you defer income, you also might seek possible last-minute deductions to lower your bill even further. Some possible deductions might include:
- Charitable contributions
- Paying estimated state or property income tax bills due in early 2020
- Paying medical bills
- Making purchases for a business
Selling Investments for Losses
If you had gains in 2019, you might consider selling not-so-successful investments to offset those gains. If your losses exceed your gains, you can use up to $3,000 to offset income, as well, and additional losses can carry over to next year.
Maximize Retirement Contributions
If you have a tax-deferred retirement account, make sure you maximize your contributions for 2019 by the relevant deadline. This can increase your retirement savings (especially if your company also contributes) while lowering your income for tax purposes.
Contact Our Tax Lawyers in San Francisco Today
Every individual has a unique tax situation, and you should discuss tax strategies with an experienced San Francisco tax attorney. At the law firm of Diosdi Ching & Liu, LLP, we assist individuals and companies with a wide range of tax-related matters. Call 415.318.3990 or contact us online to learn more about our legal services today.