6 Best Tax Return Tips for 2020

Scott Kahan |

While you’re filing your 2019 tax returns, there’s no better time to start planning for 2020. Here are a few helpful tips to consider.

  1. If you owe taxes for 2019, it’s a good idea to review your current withholding and determine if it needs to be increased or if you should pay estimated taxes to lower next year’s burden.
  2. Getting a refund? It means you withheld too much last year and paid too much in taxes. Although some people count on these refunds to fund a vacation or pay down debt, in reality withholding too much means you’re giving the government an interest-free loan. You’d be better off with a larger paycheck. Even with low interest rates, at least you’re getting something.
  3. If you’re scrambling to find 2019 receipts and other allowable deductions, create an organized filing system to track deductible expenses. It will make it easier when you’re getting ready to file next year.
  4. Fund your NYSAVES 529 plan. As a New York State resident, you can deduct up to $10,000 if married or $5,000 if single from your NYS taxable income.
  5. Look for losses in your taxable investment accounts to offset gains. That way, when the markets inevitably improve, you can use the losses against future taxable gains.
  6. Maximizing employee benefits can offer tax savings. Your company may offer fringe benefits through a flex spending plan, allowing you to set aside a portion of your pay for childcare or medical bills. This money avoids both income and Social Security taxes. Look for other benefits your employer may provide that can save on taxes as well.

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