With tax filing just around the corner, now is a great time to organize your thoughts and records to make the filing process easier. Here are some ideas:
- Create an April 15 reminder. It’s the deadline for filing your 2019 individual income tax return, completing gift tax returns, making contributions to a Roth or traditional IRA for 2019, and for paying the first installment of 2020 individual estimated taxes.
- Gather your tax information for filing. Items you’ll need include W-2s, 1099s and other forms you receive from your employers, brokers, banks and others. If you detect any errors, contact the sender immediately to request a corrected copy.
- Know business return deadlines. If you own a business or are in a partnership, the deadline for filing partnership and S corporation returns is March 16. Calendar-year C corporation tax returns are due by April 15. Six-month extensions can be requested for partnerships and corporations.
- Keep great donation records. Here’s what you need to deduct your donations: Cash contributions under $250 require a bank record like a canceled check, credit card record or a receipt from the charity. For larger donations, a receipt from the charity must be obtained before filing your return. Donations of property should include a photo, a receipt from the charity and a detailed listing of the items donated that are in good or better condition.
- Review your child’s income. Your child may be required to file a 2019 income tax return, too. Generally, a 2019 return is required if your child has earned more than $12,200, or has investment income (such as dividends, interest, or capital gains) over $1,100. If your child had both earned and investment income, other thresholds apply.
- Contribute to your IRA. There’s still time to make 2019 IRA contributions — up to April 15, or until you’ve contributed the maximum allowed. That’s the lesser of your earned income for 2019 or $6,000 ($7,000 if you’re 50 or older).
- Make any final moves. Remember, you can reduce your income by up to $3,000 of excess capital losses. So plan now to review your investments and make any final moves.
As always, should you have any questions or concerns regarding your tax situation please feel free to call.