Last Minute Tax Tips

April 15th Tax Deadline Approaches; Are You Prepared?

April is here and the final rush is upon us.  The following are some last minute tax tips to keep in mind for the end of this tax season and to prepare you for next tax season (tax year 2019).  If you are still in need of professional tax help, please do not hesitate to call us toll free at (888) APRIL-15 or click the green bar to schedule an appointment.  But hurry; the April 15th deadline is quickly approaching:

Know Your Withholding:  One of the features of the new tax laws was a change in withholding tables resulting in reduced tax withholding for many W2 employees. While reduced withholding increases your weekly paycheck, it also reduces–or in some cases entirely eliminates–your expected refund.  Please check with your employer’s accounts department to verify your withholding and make any preferred adjustments.

Extension Filings Are Up:  We’ve seen a number of our clients taking a “wait-and-see” approach to these new tax law changes.  As such, we’ve seen a large increase in the amount of extensions filed this year. If you haven’t filed yet & owe money to the government, you might want to consider filing an extension. Remember: An extension is only an extension to file your final tax return; it is not an extension to pay the taxes you owe.  An estimate of taxes due is sent along with your extension by the deadline.

IRS Filings Are Down:  The number of returns submitted to the IRS is down about 2% compared to last year.  2018 was the busiest April R&G Brenner has ever had. We expect an even busier final 2 weeks this year.

Tax Filing Deadline:  To make matters worse, the past couple of years we’ve had a couple of extra days to file. Not this year: the final day to file is April 15th.  Tax returns must be electronically filed or postmarked by 11:59 pm on 4/15 or you will be subjected to penalties and interest.  Remember: This deadline is only if you owe.  If you are due a refund you have 3 more years to claim your 2018 refund.

Holiday Season Tax Breaks

Last Minute Tax Breaks
Last Minute Tax Breaks

The notion of taxes can be stressful for anyone, and so can the holiday season. While reading about taxes and finances could destroy the holiday spirit for some, it is a great idea to be cognizant of the various holiday tax deductions to make the season much less stressful. Below is an overview of some common last minuet tax deductions and tax break opportunities that you can take advantage of this holiday season before you close the books on 2013

Tax Deductions for Business Gifts 

In many circumstances, it can be quite beneficial for a business to give holiday gifts to their clients, but this can often be a costly endeavor. Fortunately, you may deduct the cost of business gifts that are up to $25 per client, associate, or employee on your income tax return. However, it is important to note that “incidental expenses” (such as wrapping paper, holiday gift cards, insurance, and mailing) are not included in this $25 limit. It is also important to keep in mind that you may not double this limit by including a spouse or business partner when giving to the same recipient. 

There are Exceptions to Gift Tax

In a non-business circumstance, just about anything that you give as a gift to another person could be subject to gift tax on the giver’s end. However, it is important to know the exceptions to this. First, know that there is absolutely no gift tax when giving to a spouse, so you may be as extravagantly generous as you want. Also, keep in mind that choosing to pay someone’s tuition and medical expenses this holiday season not only provides a great gift, but also leaves you with no gift tax. Do make sure that if you choose to do this, you pay your money directly to the educational or medical institution (rather than to the recipient). 

Tax Benefits for Donating to Charities and Organizations 

Sometimes, the best holiday gift is giving money to a charity or organization that you care about. As far as legitimate charities go, you can send as much as you want. There is not only no gift tax, but it is tax deductible. On the other hand, it is very important to note that although there will not be gift tax when you donate to a political organization, this endeavor will not be tax deductible. 

Consider Donating Your Family’s Unwanted Holiday Gifts for Tax Breaks

It may seem cold, but it is the truth that we often end up receiving holiday gifts that we do not want. Instead of exchanging them for new items, you could donate them to charity; you will not only be helping those less fortunate than you, but you will also be able to claim additional tax breaks this holiday season. The IRS has a form that helps you to assess the value of what you end up donating, so that you may claim the corresponding tax deductions. Make sure that you obtain a receipt from the charity that you are donating to for your records. 

A Happy & Healthy New Year form everyone here at R&G Brenner Income Tax!