20 Last-Minute Tax Tips Before 2019 Ends

Many people wait to think about their taxes until April 15 gets close. But if you want to pay as little to the IRS as possible, the time to take action is now -- before the end of 2019.

These 20 tips include things you can do that could help you save money on your taxes when you file your return early in 2020.

One of the biggest tax breaks available to many taxpayers is to make 401(k) contributions. You can deduct as much as $19,000 for 2019 if you're younger than 50, or $25,000 if you're 50 or older. Talk to your HR department to confirm whether your employer offers a 401(k) and what you can do to quickly get contributions into your account before year-end.

ALSO READ: Your 2019 Guide to Retirement Plans

If you're 70 1/2 or older, then you might have to take required minimum distributions from a retirement account. RMDs can also apply if you inherited a retirement account from someone who wasn't your spouse. Those who just turned 70 1/2 in 2019 get an extension to April 1, but others have to take their RMD by Dec. 31 or face a huge 50% penalty from the IRS.

One key threshold question in end-of-year tax planning is whether you expect to itemize deductions. Everyone is entitled to a standard deduction, and if your standard deduction amount is higher than what you're likely to be able to itemize, then it can save you a lot of time and trouble. However, once you decide that you can save money by itemizing, there are many ways to boost your itemized deductions.

ALSO READ: Here's the 2020 IRS Standard Deduction -- and What It Means to You

Selling investments that have gone up in value triggers capital gains tax. However, for those who are in the lower-income tax brackets, a special provision for capital gains on property held longer than a year allows for 0% tax on those gains. That 0% tax rate just gets wasted if you don't take advantage of it, so selling winning investments by Dec. 31 can give you an unanticipated tax break.

Conversely, if you've lost money on a stock or other investment, you can claim a tax break for it. Any capital losses you get from selling a losing investment can offset capital gains from winners, or you can take up to $3,000 of any leftover losses to deduct against other types of income. Only sales by Dec. 31 count for your 2019 tax return.

If you itemize, then gifts to charity are deductible. You can deduct not only cash gifts but also gifts of property, although you'll need to be able to document the value of any property you give.

Investors should also consider giving shares of stock that have gone up in value. Doing so avoids capital gains tax as well as earning a full charitable deduction. However, it can take extra time for your broker to process a stock gift, so don't wait until the last days of the year to get started.

ALSO READ: 5 Things to Know About Charitable Donations and Taxes

Property taxes are eligible for an itemized deduction to the extent that they and other state and local-level taxes don't exceed $10,000. If you itemize, then some states will let you decide whether to pay your entire tax bill in 2019 or pay it in installments throughout the year. Making early payments in 2019 rather than taking advantage of delayed payment options can boost the size of your itemized deduction.

If you don't have enough money withheld from your paychecks for federal taxes, then you can end up owing interest and penalties. If it looks like you're in a situation in which that might occur, talk to your HR department about having extra money withheld from your pay to go toward taxes. Doing so could reduce or eliminate any penalties for 2019, as long as the money gets withheld by Dec. 31.

Even those who don't work for an employer have to make sure they anticipate and pay taxes over the course of the year. Estimated tax payments typically get made in mid-April, mid-June, mid-September, and mid-January. If you haven't been making estimated tax payments but discover you should, then the sooner you start paying, the less in interest and penalties you'll potentially owe.

ALSO READ: 3 Tax Tips for Every Self-Employed Person

Your employer and your financial providers will need to send you tax information early next year, and it's vital that you get it in a timely manner. Now's a great time to check that your mailing address is current, so that you'll be sure to get those tax records as soon as possible to be able to file your tax return.

Those who are paying to put a student through college can claim the American Opportunity Tax Credit to receive up to $2,500 in tax savings. Undergraduate educational expenses are eligible for up to four years, and if you prepay tuition for the spring semester of 2020 during 2019, you can typically use those expenses if you claim the credit on your 2019 return.

ALSO READ: American Opportunity Credit vs. Lifetime Learning Credit: Which Can You Use?

529 plans are special accounts that let you save for college and other educational expenses. Contributions aren't deductible for federal tax purposes, but some states offer their residents some savings on their state tax returns if you contribute before year-end. Check with your state tax agency for more details.

Those who are disabled face financial challenges many others don't. The tax laws allow disabled individuals to open ABLE accounts to allow savings for disability-related expenses without jeopardizing eligibility for public assistance and government programs. Loved ones can contribute a maximum of $15,000 in 2019 toward an ABLE account, but contributions must be complete by Dec. 31.

ALSO READ: What are ABLE Accounts?

If you have any control over when you receive taxable income, then taking steps to defer taking it until after Jan. 1 can help you cut your 2019 tax bill. Of course, it'll also boost your potential taxable income in 2020. But if your tax situation looks more favorable next year than this year, then that can be a smart tradeoff.

If your itemized deductions are close to the amount of the standard deduction, you can sometimes push yourself over the threshold by doubling up deductible expenses from two years. For instance, if you give to charity each year, you could choose to make your 2019 and 2020 gifts at the same time, letting you claim the double-sized amount as an itemized deduction. Doing so can get you some extra tax savings over time.

Many employers offer flexible spending accounts to their workers to help them with medical expenses. However, most FSAs have use-it-or-lose-it provisions that require you to spend the money in your FSA each year or forfeit it. Employers can give their employees the choice of having some extra time into the following year to spend their money, but you should check with your HR department to get the details on your plan.

ALSO READ: 4 Ways to Avoid Losing Money in Your FSA This Year

Converting a traditional IRA into a Roth IRA will actually cost you more in taxes for 2019. But it has the benefit of letting that retirement savings grow tax-free not just while it remains in the Roth account but also when you withdraw it. Conversions have to happen by Dec. 31 to be effective for 2019.

Unlike the American Opportunity Credit for undergraduate college expenses, the Lifetime Learning Credit applies to anyone. It can cover classes to improve your job skills as well as seeking a professional degree. With a 20% credit on up to $10,000 in qualifying educational expenses, the Lifetime Learning Credit is worth a look if you're hoping to enhance your career.

Tax season won't officially start until late January, but it's still helpful to know when and how you're going to get your return prepared. By anticipating when you'll receive tax forms with the information you need to do your return, you'll be better able to schedule time around your busy life and still get your return filed promptly.

ALSO READ: 4 Ways to Get Ready Now for Tax Season

All these tips are geared at getting your 2019 tax return in order, but it's also never too early to start thinking about 2020. By considering moves like changing your withholding and planning your investment strategy, you can get a head start on getting ready for your 2020 tax return in early 2021.

Nobody wants to spend the holidays doing tax planning, but spending just a little time on these tips can save you a lot of money at tax time. Get these things done before Jan. 1, and you could be a lot happier in April as a result.

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