Interested in shaving 8-10% off your tax bill?

It’s not too late.

There’s still time to save on your 2018 tax return.

April 15, 2019 is the deadline to make your 2018 IRA (“Individual Retirement Account”) contributions.

Deduct as much as $18,500, the 2018 limit for 401(k) Plans.

Bump that up to $24,500 if you’re age 50 or older.

That’s enough to drop most inspectors into a lower tax bracket – on top of lower taxable income.

Though the rates top out at 37% on incomes over a half million, the rates inspectors care about are:

Single/Head                       Married                                Marginal Tax Rate

$9,701 – $39,475               $19,401 – $78,950                             12%

$39,476 – $84,200             $78,951 – $168,400                          22%

$84,201 – $160,725         $168,401 – $321,450                        24%

$160,726 – $204,100        $321,451 – $ 408,200                       32%

$204,101 – $510,300        $408,201 – $162,350                        35%

If your contribution drops you out of the 22% bracket, down to the 12% bracket, you just knocked 10% off your tax bill.  10% is a very big number.  If a CD paid you the highest rate today, about 2%, it would take 5 years to hit the same jackpot.

The same thing goes for dropping from the 32% bracket down to the 24% tax bracket.  8% savings.

It’s now or never.

PS – It’s not just the tax savings, of course.  It’s also your retirement.

That day is coming.  You cannot plan for tomorrow when it is tomorrow.

The First, Leading, and Most Important acid test of any home inspector’s pricing – and business plan – is whether you make the maximum tax deductible contribution to your retirement plans.

Better yet, do that – and also make the maximum contributions to your HAS (Health Savings Account) and Roth IRA.

If you’re short of cash to make those three contributions every year, revisit prices now.

Inspectors who do not charge enough to cover basic, minimum retirement savings that are tax favored are leaving true costs out of their prices.  They either are running a charity or giving away their childrens’ money to subsidize inspections (since they’ll be living off the kids or the dole when they run out of money).

In other words, there is every reason to be sure those retirement contributions are in on your 2018 tax return.

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This material is provided for general and educational purposes only.  Nothing in this article or Newsletter provides fiduciary recommendations concerning investments or investment management.  PLI does not provide legal or tax advice.  Any tax-related discussion contained in this material, including any attachment/links, is not intended or written to be used, and cannot be used, for the purpose of (1)

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