It’s October now, which means tax season is going to be coming up faster than you know it. With more than a year since the Tax Cuts and Jobs Act officially went into effect, by now most businesses and individuals should be familiar with the bulk of the changes, even if they’re still a little confused by some of them.
With this in mind, while you’re still making the adjustment, it’s in your best interest to start thinking about the upcoming tax season now so you can get all of your tax paperwork done as efficiently as possible. Your tax return will be due on April 15, 2020. With just over two months left in the year, it’s a little late to make any large-scale changes to your tax strategy that will have a big effect on your tax liability for this year, but you can at least start getting organized to file your paperwork.
Here’s some information about tax preparation for 2020 in Hayward, CA.
Change your withholding
Changing your withholding might not help you a ton for this year, but if you think about it now, you can get it done and be prepared for next year. If you have been finding that you are getting surprised with a tax bill you didn’t expect to have, one of the reasons could be that your withholdings need to be changed. The IRS made some changes to withholding tables after the new tax law went into effect, so if you didn’t update your W-4, then you may have had some surprises with how your withholding choice affected your taxes.
Continue tracking deductions
The standard deduction may have doubled, but it’s still worthwhile to track your receipts, invoices, bills and potential deductions, just in case you’re able to save more money by itemizing. This could include donations, local taxes, medical bills, child care deductions and much more. It’s always better to have more information than you actually need.
Use your retirement plans
Funding your retirement plans can help you on your taxes. Putting money into your 401(k) reduces your taxable income, because those are pre-tax dollars going into the account. You can contribute to traditional IRAs tax-free as well. Your Roth 401(k)s and Roth IRAs allow you to take out money tax-free when you retire. There are tax benefits associated with using these plans, not to mention the benefits associated with saving for your retirement.
Get familiar with the tax laws
While you’re waiting for the tax season to begin, it doesn’t hurt to go back and study up on some of the changes that went into effect with the Tax Cuts and Jobs Act. You can find plenty of guides to these changes online that will provide you with useful information.
For more information about preparing yourself for tax preparation in 2020 in Hayward, CA, we encourage you to contact the team at Menjivar & Company CPAs, Inc. today. We’ll be happy to speak with you about any financial issues or questions you have!
Categorised in: Tax Preparation