Attorney Thomas B. Burton discusses ways taxpayers can reduce their individual income taxes owed for the previous tax year, after January 1 of the current tax year but before they file their tax return in April.
Transcript of Video: How You Can Reduce Your Taxes After January 1st But Before You File in April
In today's video I want to talk about
how you can reduce your taxable income
for federal income tax purposes after
January 1 of the current year so if you
watched one of my other videos I
talked about ways a small business owner
can reduce the taxable income for the
year before the end of the tax year but
once January 1 hits you have generally
until April 15th to file your taxes and
many people don't know there are some
ways to reduce the federal income tax
owed between January 1 and April 15th
and namely the big one is that you can
continue to make IRA contributions and
allocate them to the year before until
your taxes are filed for the year so for
example the upcoming tax period once
January 1 of 2020 rolls around Americans
will be required to file their 2019 tax
return by April 15th of 2020 or whatever
they generally it's April 15th but you
know if that falls on a weekend it'll be
April 16th 17th 18th whatever it is this
year but you can continue to make IRA
contributions from January until you
file your taxes in order to drive down
your taxable income so for 2019 a wage
earner w-2 wage earner can put up to
$6,000 is the limit if you're under age
50 into a traditional IRA or $7000 if
you're 50 or older and if you put it in
a traditional IRA that allows you a
deduction this tax year in exchange for
being taxed on the withdrawal of the
income when you retire so for each
person it's different you're going to
discuss with your financial and tax
advisor which way benefit to you you can
also
contribute to a Roth IRA where you're
taxed on the money this year but it
withdraw tax-free but depending on your
tax situation
be aware that between January and the
time you file your taxes you can
contribute to an IRA and further reduce
your taxable income for the previous tax
year so that's my tax tip for how to
reduce your taxes between January 1 and
the date you file your taxes for each
tax year so thanks for watching and
we'll see you next time.
Copyright. © 2020. Burton Law LLC. All Rights Reserve
Transcript and captions provided for ease of access for the hearing impaired.
For questions about this topic, or to suggest a topic for a future blog post, please contact my office.