Financial Consultant Steve Sexton Reveals Actions to Take Right Now to Save on 2020 Taxes
SAN DIEGO, November 19, 2020 (Newswire.com) – As Americans close out a monumental year of change, the upcoming tax season may look a little different than it once did. To help, Steve Sexton, financial consultant and CEO of Sexton Advisory Group in San Diego, California, is sharing his best advice for reducing taxes in 2020.
1. Deductions. “There several types of deductions that may be of benefit to you this year,” says Sexton. He recommends assessing medical bills, your mortgage interest, property taxes, and charitable contributions for areas to deduct. “Making an early payment on your property taxes or a charitable contribution can amount to thousands of savings when done properly.”
2. Loss harvesting. Lockdowns associated with this year’s pandemic has created an intense market. Businesses like restaurants and movie theaters have struggled, while e-commerce-focused businesses, such as Amazon, have thrived as a result of COVID-19. Sexton suggests offsetting the sale of stocks that have gained with stocks that have lost, in order to offset gains and pay less (or even nothing) in associated taxes.
3. Balance capital gains and dividends against your tax bracket. “I’ve had clients pay zero in taxation by simply looking at their tax bracket in relation to their dividends and stocks that have gained,” says Sexton.
4. Contributions. Sexton recommends contributing to tax-free accounts prior to the year’s end. “Consider maxing out or beginning a health savings account before December 31, 2020,” says Sexton. “Whatever you put into it, you will receive a tax deduction on and if you don’t use it, you can have it roll over to your IRA. Another option is to add to or start an IRA.”
5. Capital gains.“This year particularly, there are various opportunities to reduce taxes on the sale of your highly appreciated capital assets,” says Sexton. He has seen success with home selling, as remote work has allowed people to move from high tax states to lower tax states, as well as with the selling of rental properties and business owners selling their companies.
6. New opportunities for business owners. Due to the pandemic, many businesses have done away with their physical offices and gone remote. According to Sexton, this allows business owners the ability to write off their home office and get rid of unused office equipment as a tax-reducing “ordinary loss.” “Other opportunities for business owners to save in 2020 taxes include offering up bonuses in January, rather than in December, and setting up new benefit plans for employees,” says Sexton.
For more information on Sexton Advisory Group, please visit https://www.sextonadvisorygroup.com/.
Source: Sexton Advisory Group