If 2019 was a pretty good year and you're wondering how to write off revenue as you close out 2019, WWL spoke with Michael Gray, a CPA and director of taxtrimmers.com.
His first tip involves stocks: “Any stock that the value has gone down, sell those before the end of the year,” Gray says. “Develop a capital loss, now if you have other capital gains deduct those capital losses against those capital gains. Otherwise develop an additional $3,000 tax deduction.”
Gray points out many people have stopped itemizing since The Tax Cut and Jobs Act limits the total state and local tax deduction to 10-thousand dollars. But if you are itemizing another deduction generator is donating stocks to a charity: “If you have appreciated stock where you would have a long term capital gain if you sold it, make a donation of that stock,” Gray says. “You get to take a tax deduction based on the fair market value and you avoid paying capital gain on the appreciation. It’s sort of a double tax benefit.”
Closing out the year and trying to find a good deduction can be as easy as opening a retirement account, according to Gray: “If you don’t already have a retirement plan, as long as you can get one set up by the end of the year, you can make the contribution up to the due date of your tax return.”
And if you have an IRA, Gray recommends: “You can make your IRA contribution up to $5,000 up until December 31,” Gray says. “You have to have wages, or earned income, in order to deduct that IRA.
If this sounds like a good idea, act quickly—you've only got six days and consult a retirement and tax specialist.
