Tax strategy scan

"Keep records and watch the statute of limitations. The usual IRS statute of limitations is three years after you file your tax return," an expert writes.

Deferred taxation on these retirement products, in part, depends on how their distributions are made.

Adjusting a federal income tax return depends on personal tax circumstances, “such as the materiality of the error,” an expert says.

Clients who have yet to make withholding adjustments to cover their tax liability still have time to avoid the extra burden.

One option is to sell funds with lower or no estimated distributions, especially if possible savings will exceed trading costs.

Waiting too long means clients will miss out on the opportunity to maximize the plan’s full tax benefits.

Clients with children are advised to start saving early in a 529 plan to take advantage of the “tax-free or tax-deferred growth.”

Funding a Roth account, for example, may not offer upfront tax deductions, but withdrawals are tax-free.

Payouts from pensions and tax-deferred accounts are usually not taxed in states without a state income tax or with levies only on interest and dividends.

High-deductible plans open the door to tax breaks for high-income investors, an expert says.

Clients should consider paying more deductible expenses before year-end if their total itemizable deductions will be close to their standard deduction amount.

The tax basis can change when homeowners compute depreciation, loss or gain for sales purposes.

Taxpayers face a 5% penalty if they fail to meet the deadline.

Establishing an S corporation would protect their profits from federal income taxes of more than 23.8%, an expert says.

While an asset protection trust can cover nursing home care expenses in retirement, growth of these investments can trigger a tax bill.

With the net unrealized appreciation, workers can roll some employer stock into a taxable brokerage plan.

Taxpayers are advised to thoroughly review their tax withholding to ensure there is enough to cover their 2019 bills.

Those who fail to meet the cutoff face a hefty penalty that could hit as much as 25% of their dues.

Clients often underutilize deductions for work-related technology purchases and travel expenses.

Contribution limits in a Roth IRA could shrink for couples after marriage.