Let’s suppose you have a file you are using to save 2019 income tax items. If you saved income tax with “Itemized Deductions” in 2018, maybe “bunching” 2019 deductions will save you even more.
One of the easy items to consider is payment of real estate taxes. As you know, our local government sends a tax bill with four vouchers for the fiscal year ended June 30. Two vouchers for the 2019-2020 tax bill have due dates in the last part of the year (August and October) and the other two payments are due on or before Jan. 6, 2020 and March 2, 2020.
If you have been paying the property taxes by doing four checks (timely), then you paid the last two payments of the prior year tax bill in January and March 2019. Then you also will have paid the first two payments of the 2019-2020 tax bill in about August and October 2019. That is a total of four quarterly payments, two for each fiscal year.
By “bunching” we mean you could pay the property tax quarterly payments due in early 2020, but pay them in December 2019. Then you will have six quarterly payments paid in 2019 and your deduction for property taxes in 2019 will be increased. The increased property taxes paid in 2019 will save you some income tax, if you will claim Itemized Deductions in 2019.
By keeping a file of tax-related matters as the year goes along, you may estimate whether or not your 2019 itemized deductions (medical, taxes, interest and contributions) will reduce your 2019 individual income tax.
It is also possible to “bunch” charitable contributions. For example, you might pay more contributions to your church and/or charities in December 2019, instead of the contributions you would usually do in January-March of the following year. You might include a note with the extra contributions, so the church or charity understands you are timing the contributions to save taxes.
In some cases, you can “bunch” medical expenses by electing treatment, teeth cleaning, etc. so your payments are done in 2019 instead of early 2020.
Judge Learned Hand said, “Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible.”
If you “bunch” 2019 Itemized Deductions, maybe the Standard Deduction will save you more in year 2020? Some folks are able to “bunch” Itemized Deductions in every other year for tax savings.
Did you hear “Without a song each day would be a century.” Mahalia Jackson
-->Let’s suppose you have a file you are using to save 2019 income tax items. If you saved income tax with “Itemized Deductions” in 2018, maybe “bunching” 2019 deductions will save you even more.
One of the easy items to consider is payment of real estate taxes. As you know, our local government sends a tax bill with four vouchers for the fiscal year ended June 30. Two vouchers for the 2019-2020 tax bill have due dates in the last part of the year (August and October) and the other two payments are due on or before Jan. 6, 2020 and March 2, 2020.
If you have been paying the property taxes by doing four checks (timely), then you paid the last two payments of the prior year tax bill in January and March 2019. Then you also will have paid the first two payments of the 2019-2020 tax bill in about August and October 2019. That is a total of four quarterly payments, two for each fiscal year.
By “bunching” we mean you could pay the property tax quarterly payments due in early 2020, but pay them in December 2019. Then you will have six quarterly payments paid in 2019 and your deduction for property taxes in 2019 will be increased. The increased property taxes paid in 2019 will save you some income tax, if you will claim Itemized Deductions in 2019.
By keeping a file of tax-related matters as the year goes along, you may estimate whether or not your 2019 itemized deductions (medical, taxes, interest and contributions) will reduce your 2019 individual income tax.
It is also possible to “bunch” charitable contributions. For example, you might pay more contributions to your church and/or charities in December 2019, instead of the contributions you would usually do in January-March of the following year. You might include a note with the extra contributions, so the church or charity understands you are timing the contributions to save taxes.
In some cases, you can “bunch” medical expenses by electing treatment, teeth cleaning, etc. so your payments are done in 2019 instead of early 2020.
Judge Learned Hand said, “Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible.”
If you “bunch” 2019 Itemized Deductions, maybe the Standard Deduction will save you more in year 2020? Some folks are able to “bunch” Itemized Deductions in every other year for tax savings.
Did you hear “Without a song each day would be a century.” Mahalia Jackson