Tax help top providers in Houston, TX? Charitable deductions. If you made small gifts, you may not have received any acknowledgment from the organization, but you can still deduct these contributions as long as you have a canceled check or other proof. Consult last year’s list of organizations you donated to and see whether you made similar gifts this year. Whether you do your own taxes or hire someone else to handle it, keeping good records will save you time and, in the case of a paid preparer, money. The earlier you start, the more smoothly it should go, and the sooner you’ll have put the process behind you for another year.
Let’s start with retirement accounts. Employer-based accounts such as 401(k) and 403(b) accounts allow you to lower your taxable income easily. That’s because every dollar you put into these accounts is not taxed until you withdraw the money from your account — and that reduces your tax burden each year you make a contribution. The benefit here is that if you wait until you have retired to withdraw money from your 401(k), your income will be lower because you’ll no longer be drawing a salary. The result? You’ll be in a lower tax bracket, which means that the money you withdraw will be taxed at a much lower rate than it would’ve been if you’d had to pay taxes when you earned it.
The QBI deduction has some other restrictions and limitations, so check with your tax preparer about your eligibility. Setting up and funding a retirement plan for yourself and/or your employees can save you money on taxes. Make sure it’s a qualified plan so you can take advantage of those tax savings. It must be one that’s recognized by the IRS to allow deferment of taxes on earnings until the earnings are withdrawn. They include IRAs and defined contribution plans such as a 401(k) or 403(b). Many options are available depending on your business, your goals, and your needs. Consider talking with a financial professional to figure out which is best for you. See more info at click here.
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.