4 Tax Tips To Use Every Year

August 7, 2020

While some tax tips pertain to the specific year, many are universal and should be applied every tax season. Review tips your Encino tax consultants recommend using each year to streamline the process and avoid errors that cost time and money. 

Research Every Possible Deduction

Ensure you take advantage of all deductions that apply to you to avoid paying unnecessarily. For example, if you underwent surgery during the tax year or had other significant medical expenses due to an injury or illness, you can deduct them on your individual tax return. If you are an independent contractor, make certain you deduct everything relating to your business, including a portion of your rent because you work from home, a portion of your utilities, your internet bill, Paypal fees, new laptop and other equipment, and office supplies among others. 

Increase Retirement Contributions

Make larger contributions to your 401(k), IRA, or other tax-deferred retirement plan if you haven’t already. Doing so decreases the year’s taxable income in addition to helping you monetarily during your golden years. Maxing out such contributions is especially beneficial if you think you will owe taxes for the year. 

Sell Stocks

Consider selling stocks that have enjoyed financial gains at the end of the tax year if you are in the 10% or 12% tax bracket. Their capital gain taxes could be nothing, allowing you to repurchase them as you wish and reduce taxes on subsequent gains. This is also a good idea if you are “harvesting” losses and need a little help. 

Meet With a Tax Advisor

Schedule a meeting with your Los Angeles accountant service to review your taxes in depth, which identifies any errors before you send your information. Working with a tax advisor is particularly helpful if the year included life changes that impact your income, such as getting married or divorced. Starting your own business also calls for tax consultant meetings to sidestep audits and similar complications. Making beneficiary changes may require professional assistance as well. 
Discuss these and other tax tips with the Los Angeles accounting pros at Wallace & Associates.