Consider a family that gives $5,000 to charity at the end of every year. Instead of making that donation this month, it could do so in January, then make another as usual next December. The family would then have $10,000 in itemized deductions for the 2020 tax year.
The same logic can be applied to certain medical expenses. In 2019, you can deduct the portion of your expenses that exceed 10 percent of your adjusted gross income (if you itemize). So if you plan to have elective surgery, for example, it may make sense to consider the timing.
“Dental bills,” said Larry Pon, a certified public accountant in Redwood City, Calif. “Those are big ones.”
Make donations from your I.R.A.
There’s a way for some older taxpayers to get a break using charitable contributions even if they don’t itemize. Those over 70½ can make what’s known as qualified charitable distributions — a direct donation from an individual retirement account to an eligible charity. The benefits are twofold: Donations, up to $100,000 annually, are not included in their taxable income but count toward the prescribed amount they must take out each year (also known as a required minimum distribution).
“This opportunity was a good deal before tax reform, and now it can be even more relevant and useful,” said Joe Musumeci, a certified public accountant with Rowles & Company in Baltimore.
Save more for retirement.
There aren’t many pay periods left, but workers can reduce their taxable income by contributing more to their employer-sponsored retirement account, such as a 401(k), before the end of the year. Contribution limits to such accounts are $19,000 in 2019, or $25,000 if you’re 50 or older.
And there’s still plenty of time to contribute to I.R.A.s. Contributions to traditional I.R.A.s may also provide a tax deduction, as long as you meet the income limits and other rules. For 2019, contributions to traditional and Roth I.R.A.s can be made until the April 15, 2020, tax deadline. (Just be sure to tell your provider that the contribution is for the 2019 tax year.)