Top status tax help services in Houston? The sooner you meet with your preparer, the sooner you should be able to complete your return (even if you decide to file for an extension, as discussed later). If you anticipate a refund, you’ll get that sooner, too. If you wait too long to schedule an appointment with a tax preparer, it might not happen before April 15, and you could miss out on opportunities to lower your tax bill, such as making deductible contributions to an IRA or a health savings account.3? 4? Note: for 2020, the deadlines for making these contributions and for filing taxes is July 15.
Why Change the Character of Your Income? One way to reduce your tax burden is to change the character of your income. If you’re wondering why you should do so, here are some of the ways it can help you to lower your tax bill. Convert your SIMPLE, SEP, or traditional IRA to a Roth IRA. If you are over the age of 591/2 and you meet the five-year rule, Roth distributions are tax free. Because they are not considered investment income, they will not increase your modified adjusted gross income (MAGI), which is used to calculate the 3.8% Medicare surtax.
Meet With Your Tax Advisor: November is a good month to meet with a tax advisor, Powell says. They have finished their October tax filings and may have time in their schedule before the busy tax season starts after the first of the year. “If you sit down and do some math between now and the end of the year, you can make sure you are in a favorable tax bracket,” Barlin says. An advisor can help pinpoint strategies to reduce taxable income through retirement contributions or itemized deductions. That, in turn, may be key to ensuring households remain eligible for some income-based tax incentives such as student loan interest deductions. If you don’t regularly use a tax professional, Barlin says running numbers through tax software can be just as beneficial.
Businesses can take tax write-offs on purchases of business equipment, machinery, vehicles, and sometimes even real estate. These write-offs can sometimes be taken in the first year you own and use the equipment. The two most common types of this accelerated depreciation are Section 179 deductions and bonus depreciation. Section 179 deductions allow you to immediately deduct the costs of certain assets when you put the assets in service. The maximum deduction was increased to $1 million in 2018 under the Tax Cuts and Jobs Act (TCJA). Equipment, machinery, and certain real estate purchases can qualify. See even more info at https://greentree.tax/.
Be Pleasant and Control Yourself. The tone you take with your voice can impact how successful the conversation will be. If you start off the conversation with a friendly, non-confrontational tone, the customer may respond more positively. Once you have confirmed that you are speaking to the correct person about the unpaid invoice, ask if you can do anything to help. Ask if they need any additional information. If you act like you care or can understand the debtor’s side of the story, you may be able to prevent the person from becoming defensive. However, remain detached from the situation. Your job in debt collections ultimately is to collect the debt in full as soon as possible.
Carving out a few minutes every January to make sure you’re making things easy for your accountant can help reduce the risk of a mistake come April or an audit later. But we recommend talking to your tax accountant more often than twice a year. In fact, we recommend chatting regularly — even monthly. You’ll have a better handle on your business and can plan for any tax law changes. Recording income and expenses in real-time allows you and your accountant to catch any mistakes early. And your accountant will know your business better and be more empowered to offer proactive, consultative advice. According to the OnPay 2019 Small Business Finance and HR Report, small business owners who have a strong relationship with their accountant are 32% more likely to expect a significant increase in revenue over the next year.