How You Can Reduce Your Taxes After January 1st But Before You File in April

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.