Five Tips To Get The Most Out Of Your Tax Return
With tax season creeping in, you may be on the lookout for opportunities to avoid paying more than you should to the government. If you are, you’ve come to the right place! With years of experience in accounting, financial management, and tax preparation, Robert J. Wilson, P.A., specializes in small businesses and individual tax preparation and has helped numerous clients save money on their taxes. To enable you to achieve similar tax-saving results, I have listed five tips to get the most out of your tax return. Keep reading to save on your taxes and maximize your financial benefits.
Tip #1: Max out retirement plan contributions
If you have the financial capacity, aim to max out your retirement plan contributions. This will help you reduce your tax bill and also provide you with a chance to collect compound interest that is tax-deferred.
Tip #2: Take your required minimum distributions (RMDs)
Required minimum distributions refer to the sums of money you must withdraw from your retirement accounts once you reach retirement age. These withdrawals must be made regularly to avoid tax consequences. If you need to, you can even withdraw more than the RMD limit.
Tip #3: Consider “bunching” deductions
Bunching your deductions refers to the payment of deductible costs of two years. For example, you can pay the deductible costs of 2019 before the year-end, allowing you to itemize them on your 2019 tax return. In 2020, you can take up the standard deduction, which means that you need to work out your taxes two years at a time.
Tip #4: Double-check your paycheck
Make sure to read through your paycheck for tax-related deductions that may be made by your employer. If they have, you don’t have to make additional payments while filing your taxes. In case they haven’t made the required deductions, you need to do the needful.
Tip #5: Don’t ignore the IRS!
If you receive any communication from the IRS, don’t ignore it. Notices from the IRS refer to specific tax-related issues. They also include instructions to inform you about the necessary steps to fix your taxation problems. If you ignore these notices, you may be fined by the government or taken to court for delaying your taxes or attempting tax fraud. If you don’t understand the notice, it’s essential to consult a financial adviser or taxation and accounting expert.
For a professional Certified Public Accountant (CPA) in Indian Land, SC, reach out to Robert J. Wilson, P.A. I am licensed in South Carolina and North Carolina, and I serve clients across Indian Land, Fort Mill, Rock Hill, and the Greater Charlotte Area. My expertise ranges from basic tax management and accounting services to more in-depth services such as estate planning, IRS audit resolution, and financial planning. I have been in business for several years and continue to provide my clients with quality, personalized financial guidance.