Year-end is approaching, so let’s do some tax planning. Check out some tax-saving strategies below that can save you $$$:
- Put your retirement plan in place by December 31st and make sure you make a tax-deductible contribution.
- Converting traditional IRA to a Roth IRA can provide huge tax savings in the long-term. Make sure you leave the converted funds in the Roth for a minimum of five years.
- If you have a Section 105 plan and have not reimbursed expenses monthly, do a reimbursement before December 31st to get your 2019 deductions and then establish a monthly reimbursement schedule in 2020.
- If you have not executed your qualified small employer HRA (QSEHRA), make sure to get that done now. If you do not have a QSEHRA and are planning on doing so on January 1st, do that now and suffer the $50-per-employee penalty should you be found out. Alternately, consider implementing an individual care HRA (ICHRA) in 2020.
- If you have an S corporation and want an above the line tax deduction for your health insurance cost, you need the S corporation to (a) pay for the health insurance on your behalf and (b) put it on your W-2. Ensure that the reimbursement happens before December 31st and that you have the reimbursement set up to show on the W-2. It would be best if you had an accountable plan to be able to claim the deductions.
- Claim the tax credit for the group health insurance you provide your employees. If you offer your employees group health insurance, see whether your pay structure and number of employees qualifies you to claim a 50 percent tax credit for some or all of the monies you paid for health insurance in 2019 and, possibly, prior years.