Question; when do you typically start thinking about your income taxes? After New Year's, once the holidays are over and the W2s and other tax statements start to roll in? Are there moves that you should consider making sooner that could potentially lessen your tax burden? That's the discussion on this episode of CFO at Home with Financial Advisor and Owner of Balanced Capital and Heber City Tax Prep Corey Noyes
Key Takeaways (2022 Tax Year)
- The Tax Cuts and Jobs Act of 2017 raised the standard deductions to the point where many taxpayers no longer itemize. This presents an opportunity for "Tax Lumping"
- Tax Lumping - a strategy of trying to shift the timing of deductions so they are lumped together within the same year, in an effort to clear the Standard Deduction hurdle.
- Even if you take the Standard Deduction there is an allowance for charitable giving ($300 of an individual, $600 for a couple)
- Individuals over 70 years of age are eligible for the Qualified Charitable Distribution
- Qualified Charitable Distribution (QCD) - A withdrawal from an individual retirement arrangement (IRA) that's made directly to an eligible charity. QCD stacks on top of the Standard Deduction
- Preparing your taxes yourself vs using a tax preparer (questions to consider when deciding)
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- Do I want to prepare my own taxes?
- Do you have/want to spend the time it takes to get decent at it?
- The difficult part of the tax process is not the filling itself; it's the planning and strategizing
Ways to connect/follow
Contact the Host - vince@thecfoathome.com
