As the end of the year approaches, our minds turn to the holidays and a less than pleasant thought – taxes. Parents get a child tax credit for each dependent under the age of 17. Last year’s tax reform package increased the deduction from $1,000 to $2,000. Couples without any children don’t get the big tax break, but you still have some ways to decrease your tax liability for 2018 before the year ends.
These tax breaks are only eligible to couples that itemize their taxes and don’t take the standard deduction. Make sure you have all of your receipts and documentation and start looking for ways to reduce your 2018 tax debt and stay out of trouble with the Internal Revenue Service.
Be Charitable In Your Tax Plan
Charitable contributions, including donations made to your place of worship, are tax deductible. You should get a statement from your church or synagogue. You can donate to charities in several ways – you don’t always have to give money. You can also donate old clothes or furniture. Make sure you get a receipt. One tip – don’t overestimate the value. Giving away an old couch and saying it’s worth $1,000 may raise a red flag with the IRS. You can also attend charitable events that are tax deductible. Again, remember to hold on to your receipts.
Sock Some Away for Retirement
Some companies still provide 401K accounts to their employees. You get an additional bonus if your employer matches your contribution. Putting some of your money in a retirement account can keep it tax-free. You don’t need a 401K to take advantage of tax savings. Open up an individual retirement account, also known as an IRA. Just remember when you put the money in, plan on keeping it there unless you want a penalty for early withdrawal.
Check Your Health Savings Accounts
Health savings accounts (HSA) are great ways to save money for unexpected health expenses, especially if you have a high deductible insurance plan or a chronic illness. You may also set aside some funds to help offset childcare expenses. These accounts have a good and bad element: You must use them at a certain point for them to remain tax deductible. Check these accounts and find out how you can spend the money.
Do You Need That Christmas Bonus?
Are you expecting a Christmas bonus from your boss? Are you a small business owner that receives payments? You can choose to receive those payments in January so you won’t have to pay 2018 taxes on them. This is a good option if you realize you have a good amount of tax debt in 2018. The downside – you will have to pay taxes on the money in 2019.
Don’t Do It Alone
Unless you are a tax expert, an accountant, or are willing to risk it, consult a professional about your taxes. With the new tax reform law taking effect, you need to make sure you take all of your deductions and don’t leave money on the table, or in this case, with the IRS. Even if you use income tax software, it’s always a good idea to have someone else take a look at your returns before your file.
Do you have any tax tips for couples with no children? Share them with us in the comments below!