The 2019 tax year will be the second under the Tax Cuts and Jobs Act. Although the new law reduced the number of taxpayers that itemize deductions there are still ways to lower your tax bill.
- Keep organized records-While this is important for all it is especially so for self-employed individuals to be able to take advantage of all tax deductions available
- Consider bunching deductions-For example, if a taxpayer is charitably inclined, they could double the contributions they make into one tax year. Doing this may enable them to reach the threshold for itemizing
- Take advantage of retirement savings opportunities-In 2019 a taxpayer can contribute either $6,000 to a traditional IRA or $19,000 to a 401(k) plan. Those over 50 can contribute higher amounts. Maximizing those contributions will reduce your taxable income
- Equipment purchases-For business owners that need equipment, purchasing and placing it in service before the end of the year allows them a 100 percent deduction for bonus depreciation
- Tax savings through healthcare-Contributions to a flexible spending account or health savings account are not taxed and allow a taxpayer to set aside funds for near term and long-term medical expenses