Donating Stock

Donating appreciated stock at year end is a good tax planning strategy since it allows you to deduct the fair market value of the stock even though you don't have to report the appreciation as income. You have to have held the stock for more than a year for this to work. Donating stock less than a year old only allows you to deduct your cost or basis in the stock.

Business Start Up Costs

Costs incurred before a business starts operation can be deducted up to $5,000 and the remainder amortized over 15 years when operations begin. Business start up costs include advertising costs for the grand opening, organizational professional and consulting fees,  and investigative costs. If an individual fails in an attempt to start a new business, then none of the costs are deductible.

Path2College GA 529 Plan

GA's plan just got a lot better. For 2020, the state tax deduction just doubled to $8,000 per year per beneficiary for joint returns and $4,000 for single taxpayers. You can save $480 on GA taxes if you file jointly and do the max contribution. The contributions grow tax free and may be withdrawn tax free if used for qualified education expenses which now include tuition for elementary or secondary public, private or religious school up to $10,000 per student per year.

Reduce Your Taxes for 2019 Right Now

You have less than a month to take action. What should you do? See below for some ideas:

1. Clean out your garage and your closets. Make donations of household goods and clothing to Goodwill. Keep the receipt and the record of items donated and use the valuation guide at salvationarmyusa.org to value the donation.
2. Organize your tax documents in one file folder for 2019. Complete the tax organizer from your tax preparer. My tax organizers will go out mid January 2020.
3. Delay mailing bills to your cash basis business customers until late December so you won't get the payments until 2020.
4. Buy office supplies, stamps, and equipment for your business.
5. Increase your 401k contribution to the maximum. The employee deferral is $19,000 plus $6,000 more if you are age 50.
6. Donate appreciated stock to a charity.
7. Do a qualified direct contribution of your required minimum distribution from your retirement account to a charity.
8. Sell securities with losses to offset your capital gains.
9. Consider setting up a donor advised fund to concentrate your charitable contributions in one tax year.
10. Check to make sure all of your estimated tax payments for 2019 have been made. The final one is due January 15, 2020.
11. Consider an opportunity zone fund investment to defer the tax on capital gains for 7 years.
12. Contribute to a Georgia Path2College 529 plan for your child's education. The state deduction is $2,000 for single taxpayers per year per beneficiary and $4,000 per beneficiary for joint returns. The deductions have been doubled for 2020.
13. If you have a specified service trade or business and your individual taxable income exceeds $321,400 joint or $160,700 single, then it would be advantageous for you to take steps to reduce your income below these thresholds so you could benefit from the new 20% qualified business income deduction. Steps to take include retirement plan contributions, charitable donations, business equipment purchases, oil and gas investments, and conservation easements.
14. Consider a conservation easement to increase your charitable deductions to a maximum of 50% of your adjusted gross income. The IRS has designated conservation easements as listed transactions and is actively going after them in Tax Court so there is risk involved.
15. Invest in a health savings account if you are eligible.