Save Tax Money With Tax Planning, 2018-2019 and Beyond

Deadlines for taxes have been adjusted as Hurricane Florence causes floods.

Save tax money with careful tax planning.  In this blog we expand our ideas of tax planning into some profitable advice. Recently our blog offered you a triple scoop, not of ice cream, but of ways to save on taxes with careful tax planning.

How to Save Tax Dollars after the Tax Cuts and Job Act 

Save your tax dollars by planning your tax expenses months or years in advance of tax filing season.  Please do not confuse tax planning with tax filing.  It’s not too early to put tax-planning into action so you can save.  And its never too late to improve your fiscal life by learning how to do it.

Previous Article on Tax Strategy and Planning

All three of the ways to save on tax that we mentioned in our previous article had one thing in common: 3 Ways to the Tax Cuts and Jobs Act.  We invite you to read and review that article. Although this blog stands on its own, it could almost be a Part II.

Tax Planning Saves with the TCJA.
Tax Planning:  Start Early and Save.  

To put it briefly, we covered these main tax savers from the Tax Cuts and Jobs Act:

  1. Choosing Itemized Deductions Or the New, Improved Standard Deduction. (Gavrilov & Company can help you decide which course is best for you.
  2. Rules about the Famous 529’s or Qualified Tuition Plans.  (If you have to pay tuition for your children’s education, you must read up on this.)
  3. A New Way to Watch Home Equity Debt Interest…If you thought you already knew, well, think again.

Save Your Tax Dollars Another Way:  Now and in the Future

Again we are not talking about filing. We are talking about the fine art of long-range planning for proper tax payment.  That comes weeks, months and years before filing.

It also happens when you have the help of a year-round accounting and tax company or your own personal accountant. Such year round services are more cost-effective than you might think.

Perhaps you have already checked out the above three enumerated initiatives for saving tax money.  So this blog brings you another tax-planning strategy:  the newest rules for your Charitable Contributions.

Save Taxes on Your Charitable Contributions

We know you enjoy the warm feeling of helping others.  And the government rewards you with a special way to save money on the cash contributions you make to public charities.  Likewise, you can save on the contributions you make to some private foundations.

Save carefully so you can give whole-heartedly and not lose tax dollars.
Charitable giving does not have to cost as many tax dollars as you think. Save by careful tax planning.

1.  Newly created by the Tax Cuts and Jobs Act, the tax law temporarily increases the limit you can deduct on such cash contributions.  The increase you can now take due to the new laws moves from 50 to 60 percent of your adjusted gross income.

2.  One reason some people do not realize this deduction can save them tax money is the allure of the doubling of the standard deduction.

Likewise, there have been some other changes to the itemized deduction that discourage taxpayers from carefully investigating the new benefits of itemizing their tax deduction.

Thus, if you don’t itemize in 2018, you might not benefit from such laws as the above mentioned increased limit.

More than Flowers Come in Bunches–so do Tax Deductions from Charitable Gifts

You can count charitable gifts in “Bunches” to help you save on taxes.  Thus,  you could bunch up your gift dollars by increasing charitable contributions in alternating years.

  • Some people can save tax dollars by setting up donor-advised funds.
  • Accounting Today, a premiere Tax and Accounting magazine suggests you “claim a charitable tax deduction in the funding year and schedule grants over the next two years or other multiyear periods.”
  • Note:  You “can take advantage of the deduction when they’re at a higher marginal tax rate…”  But that’s not all… You can do this “while actual payouts from the fund can be deferred until later.  It’s a win-win situation.”

Saving Money By Bunching

The Tax Advisor also notes this “bunching” strategy for planning to save your tax dollars.  Read on and see how this basic strategy can

Tax Planning saves dollars.
Paying tax every year with no plan for the next year is short-sighted.

work for you.

“When individual taxpayers contribute by bunching donations, they combine multiple years of “normal” annual charitable contributions into a single year.”  And they add three main points about “bunching.”

  • “In the bunch years, they can combine large charitable contributions.
  • By this, they mean “generally, mortgage interest and SALT taxes.”  Such combinations “will increase the likelihood of exceeding the standard deduction…” (And we all know that’s a good thing because it thus provides “the taxpayers with additional tax savings.”)
  • Find even more information about charities and your charitable tax exemption at the official IRS source.

Save at Any Age with Tax Planning, Gift Planning, and Your Estate Planning

Save tax dollars when you plan your giving.  This refers not only to your current gifts to charities but also when you plan your final estate.

  1. Don’t forget income tax planning when you plan your final gifts.  “Income tax planning, as a part of estate planning, is more important than ever…” And they add “because untaxed retirement accounts make up a growing percentage of estate value.”
  2. When you fill out your charitable bequests, you might consider leaving the above-untaxed assets to your charitable bequests. Leave “appreciating assets, such as real estate, to individuals.”
  3. Find even more information about charities and your charitable tax exemption at the official IRS source. 

Could You Save Money With the Qualified Business Income Tax Deduction?

The above strategy helps you save your personal tax dollars.  However, what if you are a business owner?  Maximizing the qualified business income deduction will be essential.  You could possibly deduct 20% of your business income.

IRS Changes Deadlines for Hurricane Victims.
IRS Changes Deadlines for Victims of Hurricane Florence. Help us spread the word.

But that’s a larger topic than we can address in the space of this blog.  Don’t worry, we will be bringing you that story soon in a forthcoming blog article.

Breaking News:  IRS Delaying Tax Deadlines Changed for Hurricane Florence Victims

Gavrilov & Co would feel remiss if we did not state our empathy with the victims of Hurricane Florence.  Our thoughts are with those who have lost family and friends.  It’s difficult to watch the flood videos.  A recent notice from the IRS should help survivors to recover without worrying about tax deadlines:  The CBS announcement of the IRS bulletin stated, “Upcoming September deadlines for certain individual and business tax filings and payments will be postponed until Jan. 31 next year.”

That includes quarterly estimated income tax payments that would have been due next week and quarterly payroll and excise tax returns normally due Sept. 30.

You might need more information, as we continue to see floodwaters rise.  Gavrilov & Co recommends you visit a clear, convenient page of the IRS website that explains IRS disaster relief details for small businesses and self-employed people.

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