HARTFORD, CT (WFB) – As the end of the year approaches, so does tax time.

The deadline to get your finances in order before the calendar year closes is looming.

Channel 3 has the five things you need to know before December 31.

Ken Kron, with MahoneySabol, says now is a good time to double check your finances.

“I think it’s important to know what tax bracket you are in in 2019 and then what tax bracket you think you’ll be in for 2020 because if you have an opportunity before the end of the year to take a bonus in 2019 or 2020, you’d want to know what bracket you’re in. So, if your income is going to be higher next year, then let’s take the bonus before the end of the year,” Kron said.

That’s number one.

Number two is if you’re over 70 and a half and have to start taking a minimum distribution from your IRA, get familiar with what’s called a qualified charitable distribution or QCD.

This allows you to take that money and directly donate it to a charity, so it doesn’t apply to your income.

“It’s really a no-brainer if you’re giving to charity, you’re over age 70 and a half and you need to take that required minimum distribution, you might as well take that QCD and at least you save on your Connecticut tax,” Kron said.

Number three is balance your capital gains and losses.

“What happens is you net your capital gains and losses and that’s the amount you pay tax on. The problem is if you have excess losses, you ca only take up to 3,000 dollars a year in excess losses,” Kron said. “If you have losses, you want to get that number as close to $3,000 as you can.”

Number four is double check your withholding to make sure you won’t owe more than $1,000 and have to pay a penalty.

“Maybe my last few checks of the year I want to have excess withholding taken out, so I close that gap and I lower my exposure to a penalty.

The last important thing to remember is about giving gifts.

“The question I get most often throughout the year is the question of giving gifts to either family members or friends. That number is 15,000 per year per person. If you keep it 15,000 or less there is no paperwork for anybody, the gifts are not taxable o the recipient,” Kron said.

More information can be found here.

Copyright 2019 WFSB (Meredith Corporation). All rights reserved.


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