Oops! Its 2020 and I didn’t do any tax planning!
Silly you. But here are a few things you can still do to shrink your tax obligation. Stop procrastinating and take action! I will discuss a few of these in more detail in the following weeks.
- Organize your records – Good organization may help you or your tax pro find hidden deductions, allow you to file timely (thus reducing potential penalties) and reducing your tax return preparation time and fees.
- Make a fourth quarter estimated tax payment – If you didn’t pay enough to the IRS during the year, you may owe a large amount in taxes, penalties and interest. If you pay in by January 15th, you can avoid the fourth quarter penalties and interest.
- Contribute to your retirement account – You have until April 15, 2020 to contribute to your IRA, Keogh or SEP. If you have a Keogh or SEP and a filing extension to October 15, 2020, you can wait until then to put your 2019 contributions into those accounts.
- File and pay on time – Filing and paying on time can eliminate or reduce penalties and interest. If you can’t file your return on time, file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, by April 15, 2020. Form 4868 gives you a six-month extension of the filing deadline until October 15, 2020. The form provides an extension of time to file your return but not to pay your taxes. Therefore, you need to pay a reasonable estimate of your tax liability for 2019. Requesting an extension in a timely manner is especially important if you end up owing tax to the IRS.
- Get help! Don’t be bashful about asking for help. Of course, free help is usually worth what you paid for it.
There you have it, five things even a procrastinator can do to better manage their taxes. Call us at 727-310-8106 to discuss any tax questions you may have. Happy New Year!