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Tips for getting the most of your tax refund before you file

Posted at 9:29 AM, Dec 18, 2019

GRAND RAPIDS, Mich. — As we near the end of 2019, what are a few things people can still do to reduce their tax burden for the year?

Brian Balke is a Wealth Advisor at Legacy Trust here in Grand Rapids and he joined us in studio to offer some suggestions.

Lower Your Tax Burden

For a family of four with two kids, they will most likely be filing under the standard deduction. With that in mind, they should work to lower their tax burden. They can do this by: making a contribution to 529 plan (MI deduction is up to $10k), contribute to a Traditional IRA and/or H.SA account or if your children are away at college, you should look to take advantage of some education tax credits.

Education Tax Credits

American Opportunity Credit, Lifetime Learning Credit, or look to pay education costs before the end of 2019 to take advantage of credits.

Empty Nesters – Bunch Up

At this point, they may have a higher income and a larger savings pool. b. They could look to “bunch up” some tax deductible items to get themselves over the itemized threshold. i. Charitable contributions 1. In-kind stock either to charity or Donor Advised Fund ii. Pay state, local and property taxes in 2019

Tips for Retirees

Utilize Qualified Charitable Distributions b. Push IRA distributions into early 2020

2020 Planning

Check withholdings, Evaluate dividends and interest, Proactively loss harvest throughout the year, Utilize QCDs, Think through bunching strategy.