Tax Tip Tuesday- 2019 Year-end tax tips to lower your liability

tax tip tuesday

*this is a transcript taken from our Tax Tip Tuesday videos. You can find the full version on Youtube here.

Hey everyone, welcome to another Tax Tip Tuesday. My name is Alexis Gallati, and I'm with Cerebral Tax Advisors. Now, what we're gonna talk about today is the Section 199A deduction, and how you can actually go and lower your taxable liability so you can take advantage of this deduction. Now those of you that aren't familiar with it, that is that 20% automatic deduction that business owners get if their income is below a certain limit. And this limit is 160,700 for individuals, and 321,400 for joint filers in 2019. So if your income's above that, you don't get the deduction. If it's below it, then you can. Now, a lot of physicians and other healthcare professionals I work with tend to have much higher incomes than that, and they're like, "Oh, well I don't qualify for it." Well, not all is lost. What we can do is try to lower your, sorry, your taxable income so then that way, you can qualify for it. And some of the ways you can do that is, let's say, first off is tax-loss harvesting. Now, that's when you go, and you have capital gains, and you sell some of your dud securities, so then that way, they can go and, you can put those losses against that capital gain, and basically wipe out those gains. And so that in the end, helps lower your taxable liability. Next, you can increase your charitable deductions, your charitable contributions, by going and you know, providing a, you know, increased donations to your local charities. That goes and helps lower your taxable liability. And then there's also, just making retirement contributions. You know, if you are a W2 employee, making sure you're maxing out. If you have the ability to do, to find benefit plan, those are really amazing for helping to lower your liability. Even doing a SEP or a solo 401k. Those can greatly help to reduce your taxable income. Next, you own a business, buy business assets before year end. That way, you can take advantage of 100% bonus depreciation, and even Section 179 expenses. You know, and this could even be for things like a new vehicle. Now, when you're looking at new vehicles, you, you know, just have to make sure that you buy on or before December 31st. If it's new or used SUV or crossover, you know, this has to, it classifies, it has to be basically 6,000 pounds or more. And then you could take advantage of that bonus depreciation, Section 179 expensing. And there's usually no luxury limits on those vehicle depreciation deductions. However, if the, if you wanna buy a new or used pickup, then you know, you can go and do that same sort of thing, get the bonus depreciation, and you know, save a whole bunch of money from there. So those are some of my favorites. Some other things you can do is, you know, for the following year for 2020, or you know, hire your kid, or you know, start another side business to pick up some other deductions, and so you know, those are definitely things that I've talked, some of those things I've talked about in the past. But yeah, great. Well, if you have any other questions, you know, please feel free to reach out. Feel free to follow us on Facebook, on LinkedIn, Twitter. Check us out on our blog, we have lots of great information there. And also, you know, make sure to follow us on YouTube as well, and I have all these other great videos with more Tax Tip Tuesdays. But great, thank you so much, have a great day, bye.