Tax Day may not be until April, but smart individuals and business owners know that the fourth quarter of the year is the time to lay the groundwork for a great 2019.
Contribute to a tax-advantaged retirement account
From Roth IRAs to 401(k)s, the earlier you start putting money aside in a retirement account, the better. Adding funds now makes it more likely you’ll max out your contributions for this year.
Check your withholding
While the first piece of advice applies every year, checking your withholding is critically important for 2018 in particular. Thanks to the recent tax law changes, the amount being withheld from your paycheck may have changed. For as many as 20 percent of Americans, this may mean a bigger tax bill in April. Find out how to check your withholding.
Consider other tax-advantaged savings vehicles
A health savings account (HSA) allows you to save money for your family’s medical expenses and is triple tax-advantaged. If you have children, putting money aside in a 529 plan can help with your tax bill today – and your children’s college expenses in the future.
Get new tech on board
While it may seem like the new year is a good time to roll out new software or cloud tools for your business, getting started now will mean you’re ready to hit the ground running in 2019. QuickBooks Online can take your company to a higher level of productivity and profit – so why wait?
Evaluate your business structure
Business owners would be wise to review the business’s structure now, in order to make changes, if needed, before the end of 2018. The Tax Cuts and Jobs Act has made significant changes to the way various corporations and pass-through entities are treated.
Pay estimated taxes early
Finally, a quick, tried-and-true tax savings idea. If you are a self-employed individual who is required to pay estimated taxes every quarter, you can shave an extra chunk off your tax bill by paying your Q4 estimated taxes (usually due in mid-January) before December 31.
It’s time to set yourself up for the best tax season possible. We can help – contact us today.
—
Joe Gibbons, CPA is managing partner of Gibbons & Gibbons, P.C., a Northern Virginia-based accounting and business advisory firm that specializes in working with law firms and other professional service providers.
