So, it’s that time of year.  No, actually, it’s kind of late.  But, if you are quick- you can still find some great ways to cut your tax bill.

WE still have a little amount of time to make sure we can minimize our taxes.  Most of our clients have been working with us all year long to ensure they  pay the lowest amount of taxes required by law. But, there are always some stragglers.  (Some even think- CRAZILY- that they can adjust the taxes they might owe after 2024 rolls in. Trust me- the time is now or never.)

Obviously, what we want to do is to accelerate our expenses and delay our income.  Which will lower our tax bill. But, just to spend money to save on taxes makes no sense.

Let’s consider a few ideas.  Most of us can no longer itemize deductions.  Because TheDonald’s tax bill smushed together our personal exemptions and our standard deduction, lumping them together as the new “standard deduction”.  That means, at least for married folks, that they need to have more than $ 25900 of itemized deductions (mostly mortgage, tax payments [and remember that local and state taxes are limited to $ 10K, to boot], and charity) or $12900 for individuals/filing separately folks.  (Note if you own a pass-through organization, many states let you pay your state property tax bills via that entity- which makes them fully deductible, and lowers your gross income, too.)

But, we might be able to cross that threshold by doubling our charity this year (assuming we have the cash) to afford our itemizing.  (It will mean we won’t be itemizing next year, since we accelerated the charity we planned to give next year.)

Another thing—if our stock portfolio is mixed, and we have stocks that have made money and others that have lost value.  We can sell those losing stocks and cover the gains in the other stocks- and then buy them up again at the start of 2024. (We negate the ability to declare losses on the stock if we buy it back  in under 30 days.)

And, for those of you filing Schedule C’s (solopreneurs, gig workers, etc.), if you are netting more than $ 40,000 (which means you will owe some $6000 in employment taxes), we should talk about converting you to an LLC, S, or C entity.  (The last choice is the one least likely to be elected, but there are reasons to do so.)

And, since we are now talking about our Schedule C (but this also applies LLC, S, or C entities), we should consider what expenses we can pay this year (assuming it’s been a good year) to minimize our tax bill.  Things like buying next years software licenses, office paper, a new computer or printer… Those sort of things.

 

I generally don’t see a lot of conventions/training seminars at the end of the year, but registering and going to one of them (and getting better at our jobs) is another way to lower our tax bills. R&D and construction upgrades of our offices are another good way to minimize our tax bill.

If this is the sort of thinking that will help you, you can contact us directly via Calendly (making an appointment). or call us a t703.548.1343.  The fee for personal tax planning is $100; it’s $250 for those that file corporate tax forms (or have multiple disregarded entities).

Hurry up- time’s a wasting.

Happy holidays.