Although the 2018 tax year has come to an end, there are a few things you can do to make sure you’re taking the right deductions and maximizing your investments. From the tax laws to deduction amounts, a lot has changed this year, so it’s important you know all of your options.
Choose between standard or itemized deductions
As in investor, it’s important to decide if you want to itemize your deductions or take the standard deduction. However you file your taxes, whether it be online or on paper, you will need to list all of your deductions so you can determine whether or not it will pay to itemize. The standard deduction for taxable income if you don’t itemize has almost doubled for 2018.
Fully fund your IRA
Although you always want to fund your IRA as early as you can during the year. You can actually still contribute to your IRA all the way until Tax Day and still qualify for the deduction in 2018. Maxing out up front, however, is recommended. You can also still open one after the first of the year.
Self-employed 401(K) contributions
For those investors who are self-employed, you can also set up a SEP IRA to maximize additional deductions. You can put away up to 25% of your net income for 2018 and up to 20% if you are self-employed. Tax Day is the deadline for this but if you take an extension, you can do this until October 15th.
Maximize retirement accounts and pension contributions
Maximizing your contributions to your 401(K), or pensions are one of the biggest ways to save at tax time. You should do this as early as possible during the year but you can still contribute after the end of the year as long as the account has been set up prior to December 31st.
Check out the new tax laws
Lastly, make sure you read up on all of the new deductions, tax laws and changes for 2018 and 2019. One of the biggest changes is to the individual tax rate. Rates and income ranges have all changed for each tax bracket so make sure you know where you fall and how this will affect you.