The clock is ticking, and April 15 is right around the corner. So we have provided this handy list of quick tips for helping taxpayers determine what they owe under the new Tax Cuts and Jobs Act. The new law means that there are many changes to how taxpayers crunch their numbers. Many are claiming that they will be paying more under the plan, but there are still opportunities to reduce one’s tax burden.
7 ways taxpayers can lower their obligations
Tax experts at U.S. News & World Report have assembled several tips to optimize last-minute savings. For the sake of time, we’ve shortened it further:
- Contribute to your health savings account: This is a deduction that can be applied to money contributed up until April 15 of 2019.
- Contribute to your retirement account: This is another deduction that can be applied to payments made up until April 15 of 2019.
- Do not forget to add child care to the list of deductions: 35 percent of expenses can be deducted, including babysitting.
- Itemize deductions: Standard deductions doubled this year, but there may be other opportunities like mortgage interest, hospital care, eyeglasses, and other things.
- Write off a side hustle’s business expenses: This can be some home expenses if you do Airbnb, or it could be car expenses if you drive for Lyft.
- Claim the qualified business income deductions when possible: New this year, this is one of the most lucrative tax benefits for small business owners.
- See if you qualify for the Lifetime Learning Credit: This is one of the most flexible of tax incentives for credit on higher education classes.
Do not panic
The IRS is aware that this is a complicated new system and has lowered its usual penalty threshold from 90 percent to 80 percent of what they determine to be the correct amount. Nevertheless, the government agency is also applying this law for the first time, so they may make mistakes themselves. A knowledgeable tax law attorney can be a tremendous asset in resolving a dispute in a fair and equitable manner.