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Is Your Tax Plan Working for You?

It’s that time of year again - tax season is upon us, and we want to remind everyone of some strategies you may be able to take advantage of on your 2019 tax return. 


A strategy that many find helpful is bunching deductions, which is essentially accelerating your write offs into one year to try to get above the standard deduction. Last year was the first time for all of us filing under the Tax Cuts and Jobs Act of 2017, which doubled the standard the previous standard deduction from tax year 2016. But this year the only change is a slightly increased standard deduction over last year - $24,400 for Married Filing Jointly, and 12,200 if you’re single. 


By bunching charitable gifts, medical expenses, or even your state and local taxes into one year, you may be able to realize significant savings. However, just keep in mind real estate and state and local taxes are still capped at $10,000. 


Many people also take advantage of gifting appreciated securities. For example, even if you only paid $10,000 for a security, but it’s now valued at $20,000, you can write off the whole $20,000. This allows you to help both your favorite charity, and your bottom line. 


Another often overlooked strategy is what’s known as a Backdoor Roth. This is a way for people with high incomes to sidestep the Roth’s income limits. Basically, you fund a traditional IRA and then convert it. This can benefit you because it allows your money to grow tax free. On the other hand, this can also be complicated, so it would be best to consult with a professional.


The last strategy we recommend is called a Qualified Charitable Deduction, or QCD. A QCD is a distribution directly from your IRA account to a charity or charities of your choice, up to $100,000. In addition to the tax benefit of a charitable gift, a QCD also excludes the amount donated from your taxable income. Keeping your taxable income lower may help you to reduce certain tax credits and deductions, including Social Security and Medicare.  


It’s never too early to start on this year’s taxes, or to do tax planning for future years. If you have questions about your taxes, we offer a no-obligation consultation to members of the PSE Credit Union. You can schedule yours today by calling us at 216.521.1711, or visiting us at Lineweaver.net.


Securities offered through Triad Advisors, member FINRA/SIPC. Advisory services offered by Lineweaver Wealth Advisors, LLC. Lineweaver Wealth Advisors, LLC, is not affiliated with Triad Advisors. Information contained herein is not tax advice and should not be considered as such.  Each individual’s tax situation is unique and different. For advice related to your specific tax situation, please contact your personal tax professional. Not FDIC Insured. Not Bank Guaranteed. May Lose Value. 


 

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