3 Tax Savings Ideas for 2019
1. Check out your paycheck.
As we know, withholding tables were significantly changed when the new tax law took effect.
What you withhold from your paycheck is important. If you withhold too much, then you’ve made an interest-free payment to Uncle Sam and you’ll get a refund. If you withhold too little, then you’ll get a bill for taxes owed.
It’ll be important to compare your paystubs from this year and last, and see if your withholding is any different. If it’s considerably less and your income stayed the same, you may need to make an adjustment.
2. Make sure your side hustle is a business, not a hobby.
Another aspect that was changed concerned businesses and hobbies. The itemized deduction for hobby costs has been eliminated, but many tax breaks for small businesses were put in place.
For instance, there’s now a 20% deduction on qualified business income for certain small business owners with pass-through entities.
If you’re used to deducting hobby costs, experts agree that you should take the time while you can and expand that hobby into a business.
See how the IRS draws defines a hobby and a business here.
3. Give more to charity.
Consider utilizing the “bunching” strategy when it comes to your charitable gifts.
If you’re nearing the standard deduction mark, think about making both your 2019 and 2020 charitable contributions so that you can itemize deductions on your tax return.
As seen on Zacks