With increases in the standard deduction ($24K for couples, $12K for singles) resulting from last year’s tax changes, it has become harder to take advantage of the tax breaks provided through itemized deductions. For those of you who are taking required minimum distributions, or RMDs, having the part of your distribution go directly to charity is one certain way to reduce your taxable income. Another strategy is to “bunch up” or double up your charitable giving or your medical expenses all in one year, rather than spreading them over two or more years, so that your overall deductions exceed the standard deduction threshold.
Finally, if you are still working and have additional savings, be sure to maximize your HSA and/or 401k/IRA contributions for the year in order to reduce your taxable income for 2018! Contribution deadlines for HSAs and IRAs are April 15, 2019. The deadline for 401K or 403B contributions is December 31, 2018.
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