What Last-Minute Deductions Can I Claim in 2018?

There are a variety of strategies you can employ at the end of the year that will benefit you come tax season. Some of these strategies include deferring income when possible, selling off bad investments to offset gains and contributing the maximum amount to your retirement account. But you’re also able to take some last-minute deductions that could prove beneficial as you prepare your income tax return.

Here is some more information from our tax service in Des Moines, IA.

Accelerating your deductions

There are several strategies you can use to speed up deductions as a means of lowering your tax responsibility in 2018.

Contributing to charity is one of the most common ways of doing this. It’s not just a great way to get a deduction, but also an outstanding way to contribute to worthy causes—and during the holiday season of giving, no less. You can fully control the timing of your contribution, and can enhance the tax benefits of your giving by donating appreciated stock or property rather than just donating cash.

In addition, if you’ve owned the asset you donate for at least a year, you get more tax benefits out of the donation, in that you can deduct the market value of the property on the date of the gift while also being able to avoid paying capital gains on the property’s appreciated value over time.

Keep in mind that you should always have receipts to prove you made contributions, no matter how much or how little. Even a donation of $20 should come with a receipt so you can back up the donation if asked for proof of it by the IRS.

Charitable contributions aren’t the only expenses you can accelerate so you can lower your tax responsibility. You can also pay estimated tax bills that aren’t due until January, you could pay a property tax bill that’s not due until early in 2019 or you could make payments on doctor’s or hospital bills that aren’t due until 2019.

If you itemize

If you itemize on your taxes rather than taking the standard deduction, there are some valuable tax deductions you should be aware of. This only affects about 25 percent of taxpayers—the vast majority take the standard deduction, as it is simpler and often more effective for the average person.

You can seek the assistance of a tax professional for more information about some of the types of deductions for which you qualify if you itemize—your goal should be to surpass the standard deduction amount, which is $12,000 for individuals in 2018 and $24,000 for married couples filing jointly.

For more information about ways you can adjust your finances and take more deductions at the very end of the year to decrease your tax liability for 2018, we encourage you to contact the experts at Accounting & Tax Professionals, PLC. Our tax service in Des Moines, IA will be more than happy to answer any questions or address any concerns you have.

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