Tax preparation best providers in Houston, TX? Even if you hire someone else to prepare your tax return, you’ll need to do some of the advance work yourself—and the earlier you start, the better. Round up your receipts and check that you’ve received all the forms you need from employers and financial institutions. Last year’s tax return can be a good guide for making sure you aren’t missing any important information. For 2020, the deadline for filing taxes and making deductible contributions to an IRA or health savings account has been moved to July 15.
Consider investing in index mutual funds and exchange-traded funds. These funds are not actively managed and as a result, can be more tax-efficient than managed funds. These investments are a good way to diversify the taxation of your income after retirement. If you qualify for a Health Savings Account, you have the option of investing them instead of spending them on medical expenses. Contributions are tax-free and earnings grow tax-free, and — if you use future distributions to pay for qualified medical expenses — distributions are tax-free as well. The overall benefit of changing the character of your income is that it can reduce your MAGI for each tax year and allow you to take advantage of a lower tax bracket in some cases.
Bonus depreciation is an extra benefit for buying assets. The TCJA also increased this tax break from 50% to 100% of cost for assets placed in service from September 27, 2017 through January 1, 2023. Talk to your tax preparer if you’ve purchased any major assets to find out if you qualify. You can deduct up to $25 per person of the cost of gifts given to customers and vendors. An exception exists for those that bear your business name, are distributed as a matter of course, and cost less than $4. Deducting the costs of entertainment is a bit trickier if you show your appreciation by paying for a good time. These costs are no longer deductible unless the event is directly related to your business in some way. Read extra information on this website.
It’s much easier to sort through everything now than when 2019 is a distant memory. In fact, reviewing and organizing your records monthly helps spread the workload throughout the year instead of cramming it all into a year-end rush. Take time to go through any forms you’ve already filed (like Form 941) to check for accuracy. Make sure to confirm EIN numbers, social security numbers, and anything else the IRS might use to identify you or your employees. And when you’re done, move all your forms, invoices, and receipts into the same place — whether it’s online or a in physical folder — so you’ll be ready for tax time.