You’re probably sticking to your New Year’s resolutions. You’re spending more time in the Word ... maybe you lost a pound or two already. Good for you! But it’s not too late to add one more resolution to your list. How about resolving to pay less in taxes this year? Jesus said “Give unto Caesar”— but He didn’t mean more than you have to. Financial planner and teacher Rob West has some ways to lower your tax burden in 2019 and now’s the time to start.
On this edition of MoneyWise Live, we talk about tax year 2019 (what we’ll file next year) involving these topics:
- You want these changes to have maximum impact so you want to make them as early as possible.
- Check your withholding.
- If you have a flexible spending account or FSA, you need to plan how you’ll use those funds before the end of the year.
- Maximize contributions to their available retirement plans. Put in your 401k enough to get the full matching amount from your employer if there is one. Also keep in mind you can make additional contributions if you’re over 50.
- Bunch charitable contributions into alternate years. That would allow you to take the standard deduction one year and itemize the next.
- If you’re in a high bracket, make sure you max out your contributions to your 401k or traditional IRA because you get to use pre-tax dollars to do that.
- If you’re in a low tax bracket— consider converting a traditional IRA or 401(k) to a Roth IRA now. You’ll pay taxes— but at a lower rate.
Next, Rob and Steve answer these questions at 800-525-7000 or via email at Questions@MoneyWiseLive.org:
- How do you educate your teens on how to be wise stewards of their money now that they're older?
- If you bought a vehicle for you son to drive while in college but have plans for him to buy it from you later to teach financial responsibility, at what price should you sell it to him?
- If you're age 71 and just retired, should you consider rolling all of part of your annuity RMDs directly to your church to reduce taxes on your Social Security benefits?
- Have the new tax laws changed deductions for a home-based business?
- Did the IRS change the use-it-or-lose-it rule pertaining to unused FSA balances?
- If you're mid-20s and have avoided credit to this point in your life but are realizing you have to establish some eventually, what are some pointers?
- If your wife has student loan debt and you wish to lower the payments, how should you do it?
- If you're debt-free and have a universal life insurance policy, how do you know if you should keep it?
- If your local sewer utility has made improvements that are assessed to cost each person $30,000, what are your options?
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