2019 TAX UPDATE
‘Tis the Season…
The holidays are well behind us, and those New Year’s resolutions are waning. That can only mean one thing – it’s officially tax season. (Cue the daunting music.)
While there is very little that can still be done to change the outcome of your 2018 tax situation, this is a good time to review and plan accordingly for 2019.
A few ways you may be able to reduce your taxable income:
- Donate Stock to a charity. Using appreciated securities to make “in-kind” donations to a qualified charity can allow you to get highly appreciated securities out of your account, avoiding the capital gains tax liability were to sell the security. You receive the tax benefit of making the donation, and your charity gets a nice gift. It can be a win-win-win.
- Contribute to a 529 Education Savings Plan. Some states (including Oklahoma) allow a state income tax deduction for contributions made to 529 Education Savings Plans. The funds grow tax-deferred, and 529 Education Savings Plan funds can now be used for both elementary- and secondary-school expenses (subject to limitations).
- Make a Qualified Charitable Distribution. If you are over 70 ½ and have an IRA, you are required to take minimum distributions annually. Choosing to pay these funds directly to a qualified charitable organization may make the amount of the distribution free from income tax.
- Contribute to an employer-qualified plan or an IRA. Below is a chart listing the various contribution limits to IRAs, Qualified Plans and Health Savings Account for 2018 and 2019. Eligible contributions to some IRAs can be made for the 2018 tax year until April 15, 2019. Or, if you are self-employed, you have until you file your 2018 tax return, but not later than October 15, 2019.
Contribution limits and deductibility of contributions is subject to maximum compensation limits. Council Oak Wealth Advisors nor our employees are tax professionals. We are not providing tax advice. We will happily work with you and your tax professional to develop a plan tailored to your personal situation. If you do not have a tax advisor, we would be glad to refer you to one of our trusted professionals.