Taxpayers have a short time to take advantage of tax savings before the end of 2018. Before ringing in the New Year, consider the following:
- Have you reviewed your tax deductions? As noted in previous posts, the Tax Cuts and Jobs Act led to a serious overhaul of the tax system. One key change: the increase to the standardized deduction. As such, those who itemized tax returns in the past may find it more advantageous to use the standardized deduction for the 2018 tax year. Take some time to review the deductions for 2018 to determine the best option for your tax returns, as the rules have changed.
- Did you check for energy efficiency updates to your home? Did you get solar panels this year? Or perhaps you added additional, energy efficient insulation? Certain energy-saving improvements made to your primary residence can count towards a tax credit. In some cases, tax savings are also available for the purchase of an electric vehicle.
- Should you claim capital losses? At the moment, market losses are common. Taxpayers that have lost value in certain assets can sell those assets and claim the loss on their 2018 tax returns. These losses are generally limited to $3,000 annually. However, taxpayers can use these losses to offset capital gains and can also carry forward any unused loss and use the loss more than the $3,000 limit for future tax years.
Ease the stress that comes with tax season by reviewing these big tax questions before diving into 2019.