High status tax services firms in Houston, TX? Which receipts you’ll need to provide depends on whether you itemize your deductions or claim the standard deduction. You’ll want to choose whichever produces the greater write-off, but the only way to know for sure is to add up your itemized deductions and compare that with your standard deduction. For the 2019 tax year, the standard deduction for single taxpayers is $12,200 and for married couples filing jointly it is $24,400. For 2020, these amounts rise to $12,400 for single taxpayers and $24,800 for married couples filing jointly.
If you own a business, restructure your business entity, particularly if you are operating as a sole proprietor, LLC, or an S-Corp. The taxes for a C-Corp are lower at the top than for other business structures. However, there’s also a new 20% deduction of business income for pass-through entities. And, if you hire your children, you can pay them without withholding or matching payroll taxes if you have a sole proprietorship. You should work with an accountant to determine if restructuring your business is worthwhile. Invest in tax-exempt bonds. Any interest you earn is not subject to federal income tax and from Medicare surtax calculations. Also, municipal bond interest for bonds purchased in the state where you live is exempt from state income taxes, too.
Meet With Your Tax Advisor: November is a good month to meet with a tax advisor, Powell says. They have finished their October tax filings and may have time in their schedule before the busy tax season starts after the first of the year. “If you sit down and do some math between now and the end of the year, you can make sure you are in a favorable tax bracket,” Barlin says. An advisor can help pinpoint strategies to reduce taxable income through retirement contributions or itemized deductions. That, in turn, may be key to ensuring households remain eligible for some income-based tax incentives such as student loan interest deductions. If you don’t regularly use a tax professional, Barlin says running numbers through tax software can be just as beneficial.
Businesses can take tax write-offs on purchases of business equipment, machinery, vehicles, and sometimes even real estate. These write-offs can sometimes be taken in the first year you own and use the equipment. The two most common types of this accelerated depreciation are Section 179 deductions and bonus depreciation. Section 179 deductions allow you to immediately deduct the costs of certain assets when you put the assets in service. The maximum deduction was increased to $1 million in 2018 under the Tax Cuts and Jobs Act (TCJA). Equipment, machinery, and certain real estate purchases can qualify. See even more info at https://greentree.tax/tax-preparation-service-in-houston/.
Don’t Assume Anything. When making your initial debt collection call, quickly make sure that the debt has in fact not been paid. Don’t alienate the customer. Remember there may be potential future business with the customer. The debt in question could be a mistake and not a collection problem at all. Be careful with your tone and your words at this point. Wait and listen to what the customer has to say, and be sure to document the interaction carefully and accurately.
Carving out a few minutes every January to make sure you’re making things easy for your accountant can help reduce the risk of a mistake come April or an audit later. But we recommend talking to your tax accountant more often than twice a year. In fact, we recommend chatting regularly — even monthly. You’ll have a better handle on your business and can plan for any tax law changes. Recording income and expenses in real-time allows you and your accountant to catch any mistakes early. And your accountant will know your business better and be more empowered to offer proactive, consultative advice. According to the OnPay 2019 Small Business Finance and HR Report, small business owners who have a strong relationship with their accountant are 32% more likely to expect a significant increase in revenue over the next year.