3 Time-Tested Tax Moves

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Feb 01, 2019

By Sarah Murphy, CPA Manager at Terry Lockridge & Dunn

While you may find yourself overhauling your yearly tax strategy in light of new tax laws, there are three time-tested steps you can take to start your 2019 on the right foot:

  1. Check your withholding. Confirm you have the right amount withheld from your paycheck in 2019. Doing this will help you make sure your withholdings will meet minimum tax payment requirements, so you do not end up paying underpayment penalties or providing interest-free loans to the IRS. It is especially important to check if you recently had a change in income, or you have experienced a big life event, like a childbirth or new home purchase. You can check your withholding using the IRS Withholding Tool. If you need to change your withholding, complete a new Form W-4 and submit it to your employer as soon as you can. (Both the withholding tool and the form can be found on the IRS website.)
  2. Prioritize retirement and savings plans. Take time to review your 401(k), individual retirement account (IRA), health savings account (HSA), and other savings accounts to ensure you are maximizing your tax savings. Establish a regular contribution schedule early in the year, while considering new maximum contribution limits. And if you are working, make sure to take full advantage of your employer's retirement matching program.
  3. Create your investment strategy. The beginning of the year is a great time for you to conduct a review of your investment portfolio. For example, you may wish to match stock sales with gains against sales of stocks that are held at a loss. Or harvest stock losses at the beginning of the year and repurchase them later in the year to avoid the IRS wash sale rules. Also consider tax-efficient distributions out of retirement accounts after reaching age 59 ½.

Find out more about creating an effective tax strategy using these tips and others when you call to set up a tax strategy planning appointment. Contact Sarah at smurphy@tld-inc.com, or any of the accountants at Terry Lockridge & Dunn to discuss how the changes impact your situation. They can be reached at 319-364-2945 in Cedar Rapids, or at 319-339-4884 in Iowa City.