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Lower Your Tax Bill With These Last-Minute Moves

Lower Your Tax Bill With These Last-Minute Moves
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If you haven’t filed your taxes yet, we have some good news: There’s still time to lower your bill. When the IRS pushed back the filing deadline to July 15, 2020, some other deadlines moved along with it, which may give you the chance to make some late-breaking moves to slash what you owe or increase your tax refund.

Make a traditional IRA contribution

If you have a traditional IRA, you may still contribute up to $6,000—or $7,000 for 50 or older folks—through July 15. The same rules apply for spousal IRAs. If you file taxes with your spouse, you may contribute to each other’s IRAs, even if one of you doesn’t work outside of the home.

Your tax deduction may depend on two factors: your workplace retirement plan and your income. The rules can be a little confusing, but the IRS offers a couple of charts to make them easier to grasp:

Contribute to your health savings account (HSA)

If you had HSA-eligible health insurance in 2019, you may also contribute to your health savings account through July 15. The contribution limit is $3,500 for individuals or $7,000 for family health insurance plans.

Your HSA offers three tax benefits: You may deduct your HSA contribution every year; you may invest and grow the money tax-free; and when you’re ready to spend it, you won’t pay taxes on withdrawals for qualified medical expenses.

Tally up your business deductions

There is still time for freelancers, independent contractors, gig economy workers and small business owners to get organized with deductible expenses. Some of the big ones may include, but aren’t limited to:

You can read more about business deductions for 2019 here. When in doubt, it’s always better to defer to a qualified tax professional like a Certified Public Accountant (CPA) or Enrolled Agent (EA). Otherwise, you may have trouble later.