Personal Finance
December 4, 2018

3 Steps To Take Now To Buffer Your Hit at Tax Time

Simple. Thrifty. Living.

You don’t have to wait until the spring to start fretting over taxes. In fact, it’s best that you get a head start on your taxes now so there are no surprises as the deadline nears—especially considering 2019 brings some major tax changes. So if you want to increase your return, reduce what you owe or just keep your stress down this spring, here’s what you need to do.

First, know that 2019 is probably going to be even more confusing for most people because there are some big changes coming up. This means the amount you owe or get back might be different than usual, which is a great reason to prepare for  tax season ahead of time. For example, the tax brackets have changed, so you’ll likely pay a smaller percentage of your income than usual. Plus, the standard deduction, child tax credit and expense limits on capital assets have all increased. At the same time, some tax deductions no longer exist, and some limits have changed, so it’s important to read up on all the tax changes for 2019 long before you file.

With the tax changes comes a new withholding table, which means your employer has likely been withholding a different amount from your checks than before. That amount varies depending on how many allowances you claim and the amount of money you make, so now is a good time to review your withholding. And take note that while it used to be helpful for some to withhold less so they could itemize deductions, that might not be true anymore since the standard deduction doubled. So keep the tax changes in mind as you review withholding at work. Otherwise, you might end up unexpectedly owing at tax time!

Before you file your taxes, make sure you take advantage of the many ways you can owe less—or get more back. Start by gathering proof of any deductions you want to take. For example, if you’re paying on a student loan, you can deduct the interest from that. If you own a small business, you’ll have plenty of deductions for your home office and travel expenses. Plus, in most cases, you can deduct your contributions to charity and certain retirement accounts, so gather any receipts or bank statements that show these expenses if you want to get more back at tax time.

If you have questions about the new tax laws or want to learn more ways to maximize your return, consider hiring a tax professional to do your taxes in 2019. But whether you hire a tax pro or do the job yourself, make sure you get started early to avoid feeling stressed as April approaches!

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