End of the Year Tax Preparation (Part One!)

While the holidays are on the minds of so many of us, the end of this fiscal year and getting ready for the upcoming tax season needs to be just as important right now. Don't lose your holiday joy, but add this awareness to your to-do list before and after we ring in the new year! 

Hello, Goose Creek! Can you believe that we're almost at the end of this fiscal and taxable year? 2020 has seemed to drag on and pass by in a very strange flash. It has been a difficult year for our financials with a cut-off tax date of July 15th, a stimulus check, working from home, being furloughed, losing jobs, and starting all over again. While you might not have checked all of those boxes, we're sure you checked some of them. While the holidays are already difficult for so many people and their fiances, 2020 might be even more difficult. We also need to keep in mind that tax season, regardless of where we all are right now, is still going to be a lot sooner than you might think. The end of the year might seem like it's a long way off, but only a few weeks between us and the New Year remain on our calendars. Once January arrives, we'll blink and April 15th will be here in no time. With the strain of the holidays, 2020's toll, and an ending fiscal year, and another one starting soon, we wanted to give you a like holiday cheer with this blog. In this two-part blog, we will be sharing some tips and suggestions on how to prepare for the end of the year and the beginning of the year when it comes to doing your taxes, properly and professionally getting them done, and how to save as much money as possible. 

Goodbye, 2020! 

• Please remember that tax planning and making moves to reduce what you'll be paying next year is unique and different for everyone. You need to find what works for you. 
• Right now, one of our biggest suggestions is to get all of your tax paperwork collected now. This year came with its own brand of unique things that have changed and affected our financial standings. You might have filed for unemployment, lost your job, gained a new job, didn't receive your tax returns until late summer since tax season ended on July 15th, and we've all been given a stimulus check. For a lot of us, all of these things were new. If not that, the entire timeline of getting your taxes completed and refunds received were way off. Even these small, or for some, huge changes can throw off your organization and preparedness for the upcoming tax season. Avoid any headaches when dealing with what's left of 2020, stay prepared, and stay organized. 
• Right now is the perfect time to make choices and moves to help cut what you owe on your next tax return, and you have just enough time to tie up these last few decisions to make tax paying a little less painful next year. 
• Look into ways to make those end of the year last-minute tax deductions. Lower your tax bill by giving a little more, all while giving back to your community, helping your company, and more. A great way to add to your deductions is by giving to charity. Make sure, no matter how much you donate, that you keep all of your paperwork and receipts when doing so. You can make your donation count even more when you donate property or stocks instead of cash. According to TurboTax, if you've owned what you're donating for a year or more, you can deduct what the property value is on the day you give the gifts, and you can "avoid paying capital gains tax on the built-up appreciation". 
• Make donations now to your HSA account and your 401(K). You can contribute to your HSA up to tax day of next year, but you only have until December 31st of this year to contribute to your 401(K). These donations will decrease your taxable income. Plus it's a great investment into yourself. 
• If you've had a very difficult year financially, and you need to dip into your retirement savings to help you get by and make it through, make sure to do so by the end of the year. Thanks to the CARES Act, according to US News, you can take up to $100,000 out of your retirement savings and not pay the penalties for doing so as long as you take it before Jan 1st. You will also have three years to pay off your withdraw. 
• Make sure to plan and start saving if you haven't already for what you'll be owning and paying for your taxes in 2020. 
• Save all documents for deductible items. 
• Are you a small business owner or are you self employed? You can save a ton of money now by purchasing goods and services for your company. If you are working from home, please make sure to double and triple check all of the things you and are not allowed to write off. For example; some of you, you'll be able to claim your home office if you strictly use it for work. 
• Make time to meet with us or your tax advisor and dig into your 2020 taxes early to see if they can find any deductions or to cut back this year or other ways to cut down your taxes in the upcoming year. Our advice? When they give you a suggestion, take it!! 

There is a lot to do before the end of the year, and we hope these tips and suggestions have gotten you geared up and ready to get started. While it is so easy to just sit back and relax this time of year, we encourage you to get ahead of the game and end this year out strong. We hope you enjoyed the first part of this blog, and we look forward to bringing the second half to you soon. Until now and then, if you have any questions, please don't hesitate to reach out to us! Remember, if you are looking for the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!

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