Reduce Your Taxes for 2020 Right Now

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

1. Make cash contributions to charities. You can offset 100% of your adjusted gross income this year with cash contributions instead of just 60% as in prior years.

2. Sell stocks that have losses to offset your capital gains. 

3. Do not take a distribution from your retirement plan this year. Required minimum distributions are not required for 2020.

4. Consider an opportunity zone fund investment to defer capital gains for 6 years.

5. Consider setting up a donor advised fund to concentrate your donations this year so you can itemize. 

6. Contribute to a Georgia Path2College 529 plan for your children's education. The state deduction is $4,000 per beneficiary for single returns and $8,000 per beneficiary for joint returns. 

7. Increase your employee 401k contribution to the maximum of $19,500.

8. Consider oil and gas investments and section 181 film investments.

9. If you have earned income, maximize your retirement plan contributions. You can contribute a maximum of $6,000 to an IRA and $7,000 if you are age 50 and above. If your income is above certain thresholds, your deduction may be limited.

10. Delay mailing bills to your customers until late December so you won't get payments until January if you have a cash basis business.

11. Make donations of household goods and clothing to Goodwill.

12. Buy office supplies, equipment, stamps, and software for your business.

13. Consider getting a mileage app like Mile IQ or a mileage log to document your business mileage. Undocumented business mileage will be rejected upon an IRS audit. 

14. Check to make sure all of your 2020 quarterly estimated tax payments have been made. The final one is due January 15, 2021.

15. Organize your tax documents in one file folder for 2020. Complete the tax organizer which will be sent to you soon. Summarize business expenses, cash donations under $250, medical expenses, and rental expenses and put amounts on the organizer. Keep the receipts at home.