Top quality tax help providers in Houston, TX? State sales taxes: This write-off makes sense primarily for those who live in states that do not impose an income tax. You must choose between deducting state and local income taxes, or state and local sales taxes. For most citizens of income-tax-states, the income tax deduction usually is a better deal. IRS has tables for residents of states with sales taxes showing how much they can deduct. But the tables aren’t the last word. If you purchased a vehicle, boat or airplane, you get to add the state sales tax you paid to the amount shown in IRS tables for your state, to the extent the sales tax rate you paid doesn’t exceed the state’s general sales tax rate. The same goes for home building materials you purchased. These items are easy to overlook. The IRS even has a calculator to help you figure out the deduction, which varies by your state and income level. Beginning in 2018, your itemized deduction for state and local taxes is limited to $10,000 per year. You still will only be allowed to deduct either state and local sales tax or state and local income taxes, but not both.
Make 401(k) and HSA Contributions: People can make tax deductible contributions to traditional IRAs up to April 15 of next year. However, the door closes on Dec. 31 for 401(k) and health savings account contributions. “It’s a hard stop,” says Wendy Barlin, a Los Angeles-based CPA and author of “That’s Deductible!: Simple Tips and Tricks to Find More Business Tax Deductions.” “Whatever opportunities you have at work (for retirement savings), make sure you maximize them before the end of the year,” she says. Taxpayers with a qualified high-deductible family health insurance plan can deduct up to $7,000 in contributions to a health savings account. Individuals with self-only coverage can deduct $3,500. Those age 55 or older are eligible for an additional $1,000 catch-up contribution. Tax deductible contributions to a traditional 401(k) are capped at $19,000 for 2019. Workers age 50 and older can make an additional $6,000 in catch-up contributions.
Under CCPA provisions, an employer cannot discipline or terminate an employee whose wages are being garnished for a solitary debt. However, federal laws and CCPA provisions do not extend protection for employees with multiple wage garnishments. Some states may provide greater protection for employees by increasing the number of garnishments that can serve as the basis for termination or by prohibiting all terminations because of garnishments, so it is important to understand any applicable state regulations that may affect your business. See additional information on Bookkeeping Services In Houston.
Collect Pertinent Income and Expense Information: Around the end of January each year, employers, vendors, financial institutions, and others prepare and forward various tax forms and information pertinent to your filing. Create a set of files – whether that’s a large multi-pocketed accordion file, a group of large manila envelopes, or a digital filing system on your hard drive – to sort and separate the data into one of the following categories: Personal Information. This information should include your legal name, as well as the legal names of your spouse and all dependents. You also need their Social Security numbers and dates of birth. I also keep my primary bank information – account number and bank routing number – so I can request a direct deposit refund if circumstances warrant. Income. Common forms include W-2s from employers; 1099 forms for other types of income, such as self-employment, investments, and retirement distributions; and K-1s for any partnerships in which you participate. Keep a separate folder for security transactions so you can quickly determine holding periods from buy and sell dates to ensure you qualify for capital gains treatment wherever possible.
Look back to last year’s return? Hopefully by now you’ve filed your tax return for last year, or filed for an extension. If you’ve already filed your taxes for the current tax year, look back and think about areas that were problematic or extra stressful. Then think about how you can alleviate that stress for next year. For example, if you did your own taxes and had trouble with the math, consider using a free online tax-preparation service like Mtptaxes next year. If you had trouble verifying contributions you made to charity, plan how you’ll keep better records so it’s easier to claim a charitable deduction.
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