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    • 2020 News Articles >
      • December Client Letter - Cruising at 30,000 Feet
      • 9 Tax Facts & Tips to Save You Money
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      • November Client Letter - Election 2020
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      • Why Waiting For A Market Rebound Could Cost You
      • How The Greatest Generation Approached September 11th
      • Laid Off And Near Retirement - What Now?
      • The SECURE Act
      • Market update: When favorable fundamentals collide with uncertainty
    • 2015 News & Articles >
      • To be happy, be grateful. - It's science!!
      • Market Volatility - So Now What?
      • Retirement planning: Start early or start late – just start
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      • 2014 In Review - A bullish mood and risks that dot the landscape.
      • A sneak peek at 2015 – What to keep an eye on
      • Getting The Most Out of Financial Aid for College
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      • 2013 - US Government Shutdown - What it means
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      • 2011 - Intelligent Computer Shopping
      • 2011 - 7 things you and your student should discuss before they head off to college
      • 2011 - 7 mistakes to avoid when exiting your business
      • 2011 - Why you need an Estate Plan even if you don’t live in a mansion
      • 2011 - Celebrating Irish Heritage
      • 2010 - Priorities: Retirement Planning Vs College Savings for Children
      • 2010 - in review, and a look toward 2011
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      • 2010 - Business Owners – a special case for diversification
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      • 2016 - November Letter to Clients: The Final Countdown?
      • 2016 - December Letter to Clients: Near Term Impact of Trump's Victory
      • 2015 - September Client-letter: Looking past scary headlines
      • 2015 - November Client Letter: The Clouds Part
      • 2015 - December Client Letter, A Baker's Dozen: 13 Smart Planning Moves

A taxing time–7 ideas to ease the burden

Taxes–you can’t avoid them, but you can make the annual ritual a little less, well, “taxing” with proper planning and preparation. And, you may be able to reduce this year’s burden. I’ll offer more details next month, and as always, we will be looking at each individuals capital gain/loss situation for tax purposes in late December, but let’s get started today with an overview.
 
1. Record keeping. Come January, you’ll be receiving your W-2s, 1099s, form 1098 (mortgage interest), itemized lists of donations to charities, and more.  Decide now where you would like to store your records. Do you do your own taxes every year or does a tax professional prepare your return? In either case, have the necessary records in an easily accessible location. That way, you’re not scrambling when tax time begins.

2. Changes in marital status and withholdings. Whether you are getting married or are going through a divorce, a change in marital status can have a significant impact on your tax liability.  You may need to complete a new W-4 form with your employer. If you are self-employed, an adjustment in quarterly payments may be in order.  If possible, it’s best to avoid the need to write a big check to the IRS that triggers an underpayment penalty. While some folks enjoy getting a big refund each year, the April windfall comes in the cost of an interest-free loan to the government.

3. Maximize retirement contributions. If you participate in an employer-sponsored plan, let’s see if you can contribute the maximum amount. More importantly, by not participating in any portion of the employer match, you are passing up a free gift–a gift that will pay dividends via long-term appreciation.

4. Charitable donations. The standard deduction has been raised and fewer folks will benefit from itemizing. Still, many find satisfaction in donating cash to their favorite causes even if a tax benefit is not forthcoming.  Some charities gladly take non-cash donations. It’s a great way to remove items from your home you no longer need, and someone less fortunate will benefit. If the value of all non-cash donations exceeds $500, you will be required to complete Form 8283 (IRS: About Form 8283, Non-cash Charitable Contributions).

5. Health care coverage. Tax reform eliminated the penalty for failing to have health insurance, but the individual shared responsibility provision was eliminated for tax year 2019. If you or family members do not have the minimum essential coverage, you may be subject to a penalty when you file for 2018.  Most taxpayers will simply check a box to indicate that each member of their family had qualifying health coverage for the whole year (IRS: Health Care Law: Do You Have Minimum Essential Coverage?)

6. Health savings accounts. If you have a Health Savings Account (HSA) eligible plan, you can contribute up to $6,900 for your family. The contribution limit for self-only coverage is $3,450 (IRS: 2018 HSA contribution limit for individuals with family HDHP coverage).  Contributions can help lower your taxable income, and you’ll have a savings account that’s available to assist for qualified medical expenses.
​
7. Gift taxes. Are you giving gifts this year? If so, be aware that anything over $15,000 triggers the gift tax. There is a $30,000 exclusion for couples (IRS: Frequently Asked Questions on Gift Taxes).  The gift tax is generally paid by the donor, not the recipient of the gift.
 
This is not an all-inclusive list, and you may not have had any significant changes in your financial situation this year, But, getting an early start can prevent the troubles that always seem to surface in April.  As with any tax situation, feel free to contact your tax accountant.
 
I hope you’ve found this review to be educational and helpful. As always, I’m honored and humbled that you have given me the opportunity to serve as your financial advisor. If you have any concerns or questions, please feel free to reach out to me at john@kyleshill.com  or call me at 614-395-1295 and we can talk. That’s what I’m here for. 


 
John A Davidson, CFP®

Your comments and questions are always welcome.
We look forward to hearing from you.  mail@kyleshill.com


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- John Davidson, CFP
  • Home
  • Background
    • About Us
    • Q&A
    • Disclosures
    • Privacy Policy
  • Services
    • Planning Process
  • Clients
    • Business Owners
    • Individual Professionals, Families, Retirees
  • Contact Us
    • Newsletter Sign-Up
    • Useful Websites & Quick Hits
  • Account Access
  • News
    • 2021 News Articles >
      • Not Your Fathers Economic Recovery
      • Are HSAs the New IRAs?
      • REVENGE OF THE NERDS - Internet forums vs. the professionals
      • Protect Your Financial Information
      • 2021 January Market update - A rollercoaster year ends on a high note
    • 2020 News Articles >
      • December Client Letter - Cruising at 30,000 Feet
      • 9 Tax Facts & Tips to Save You Money
      • 9 Smart Planning Moves to Consider
      • November Client Letter - Election 2020
      • 7 Financial Planning Steps for Year End 2020
      • 6 Tips on Filing the FAFSA
      • Circling Back to the SECURE Act!
      • A September Pothole
      • 6 Steps That Put You on the Path to a Successful Retirement
      • Consumer Scams Part 2
      • September 2020 Client Letter
      • Consumer Scams
      • May Client Letter-- Worst-Ever Economy Yet Stocks Show Best Monthly Gain Since '87
      • Why Waiting For A Market Rebound Could Cost You
      • How The Greatest Generation Approached September 11th
      • Laid Off And Near Retirement - What Now?
      • The SECURE Act
      • Market update: When favorable fundamentals collide with uncertainty
    • 2015 News & Articles >
      • To be happy, be grateful. - It's science!!
      • Market Volatility - So Now What?
      • Retirement planning: Start early or start late – just start
      • 2015 Financial Planning Checklist
      • 2014 In Review - A bullish mood and risks that dot the landscape.
      • A sneak peek at 2015 – What to keep an eye on
      • Getting The Most Out of Financial Aid for College
    • News - Archives >
      • 2014 - Cheaper by the Dozen: 12 smart year end planning moves
      • 2014 - How safe is your personal information?
      • 2014 - Hey, what’s your number?
      • 2014 - What did we do before GPS?
      • 2014 - Changing Jobs Checklist
      • 2013 - US Government Shutdown - What it means
      • 2013 - Investing in College
      • 2012 - Getting (back) on track - The best part of my job…
      • 2011 - The Henny Penny School of Investment Wisdom
      • 2011 - 8 Ways to Help Couples Overcome Money Conflicts
      • 2011 - Intelligent Computer Shopping
      • 2011 - 7 things you and your student should discuss before they head off to college
      • 2011 - 7 mistakes to avoid when exiting your business
      • 2011 - Why you need an Estate Plan even if you don’t live in a mansion
      • 2011 - Celebrating Irish Heritage
      • 2010 - Priorities: Retirement Planning Vs College Savings for Children
      • 2010 - in review, and a look toward 2011
      • 2010 - New Years Resolutions - 2011
      • 2010 - Business Owners – a special case for diversification
      • 2010 - Year End Planning 2010
      • 2010 - Paying for college - Applying for student aid, determining your Expected Family Contribution
      • 2010 - Paying Taxes
      • 2010 - Job-Loss
      • 2010 - Habits
      • 2009 - Shopping
      • 2009 - Gift-Idea
      • 2009 - Thanksgiving
      • 2009 - Q3
      • 2009 - Recovery
      • 2009 - Results
      • 2009 - Digging
      • 2009 - Time
      • 2009 - Considering
      • 2008 - Planning
      • 2008 - Resolutions
    • Life Transitions >
      • Get A Job/Leave Job >
        • 9 Questions to ask your CPA at tax time
        • Getting (back) on track - the best part of my job
        • Changing Jobs Checklist
        • Job Loss
        • Taxes - 7 ideas to ease the burden - 2018
        • Year End Planning Checklist: 12 smart planning moves to consider
      • Marriage/Divorce/Re-Married >
        • 8 Ways to Help Couples Overcome Cash Conflicts
      • Kids (Birth/College/Marriage) >
        • 7 Things you and your student should discuss before they head off the college
        • Getting The Most Out of Financial Aid For College
        • Investing In College
        • Budgeting For Students
        • Save on Textbooks
        • Subsidized vs unsubsidized loans – what’s the difference?
        • 7 Tips for Your College Bound Student
        • “What I did on my Summer Vacation – 2019”
        • Budgeting for College Students - 2018
        • Most Significant FAFSA Changes in over 20 Years!!
        • Direct 529 Plan Changes To Be Implemented
      • Birth/Death >
        • Is a cash windfall in your future?
        • Planning for People with Special Needs
    • Client Letters >
      • 2019 - July Client Letter: Records Are Made To Be Broken
      • 2018 - Summer's Hot Issues
      • 2018 - November Market Update:
      • 2016 - January Client Letter - A volatile year ends with a whimper
      • 2016 - September Letter to Clients: The Ides of September?
      • 2016 - November Letter to Clients: The Final Countdown?
      • 2016 - December Letter to Clients: Near Term Impact of Trump's Victory
      • 2015 - September Client-letter: Looking past scary headlines
      • 2015 - November Client Letter: The Clouds Part
      • 2015 - December Client Letter, A Baker's Dozen: 13 Smart Planning Moves