These suggestions are focused on helping you reduce tax burdens, save money, and avoid tax fines.
Don’t jeopardize your peace of mind, make sure your tax return is prepared and submitted the right way. Here 4 tax tips you need to consider:
1. Contribute to Retirement Accounts.
For 2019, the max. IRA contribution you can make is $ 6,000 ($ 7,000 if you are 50 or older at the end of the year). For freelancers, the maximum annual addition to SEP and Keoghs for 2019 is $ 56,000.
If you do not already have a retirement account for 2019, do so before April 15, 2020.
That is the deadline for contributions to a traditional IRA, deductible or not, and to a Roth IRA.
If you have a Keogh or SEP and get a filing extension until October 15, 2020, you can wait until then to enter the 2019 contributions into those accounts.
2. Make an Estimated Tax Payment.
If you make an estimated payment before January 15, you can avoid any fine for the fourth quarter, but you still have to pay a fine for previous quarters if you did not send any estimated payment at that time. If you did not pay enough to the IRS during the year, you may have an outstanding payment.
In addition, you may also owe interest and fines! According to the IRS rules, you must pay 100% of the tax obligation last year or 90% of this year’s taxes or you will owe a fine for insufficient payment.
3. Organize your Records to Prepare Your Tax Return.
Organizing all the documents and supports can help you to prepare an appropriate income tax return and filed it on time without to take all available deductions and credits, the documents include:
- Last year’s tax return
- W-2 and 1099 this year
- Interest Statements – for example: investment account, home mortgage loan
4. Decide if You Need Help.
When in doubt, get in touch with a professional. Most tax preparation businesses offer a free consultation and estimate of the cost. When making your selection of who to work with, ask for credentials and check them on the IRS page. In addition, look for personal and online references. Tax professionals are dedicated to the preparation and filing of taxes before the Internal Revenue Office (IRS).
You may be able to prepare your income tax return without help of a professional. The IRS has enough information on its website (irs.gov) as well as by phone. Here are the IRS phone number for different types of tax entity.
- Individuals: 1-800-829-1040
- Businesses: 1-800-829-4933
- Non-profit Taxes: 1-877-829-5500
- Estate and Gift Taxes: 1-866-699-4083
- Excise Taxes: 1-866-699-4096
- For the hearing impaired: 1-800-829-4059