Self employed, taxes are going to hurt- last minute deduction ideas? HELP!

[thefed]

I didnt necessarily underestimate terribly, but the huge tax bill is going to hurt bad.

I maxed out a simple IRA as well as a roth (obviously not deductible).

Any ideas where i can park about 10k cash i have saved to lower my income a bit? kinda late i know, but just wondering what last minute efforts can be made short of buying a new company truck...hsa? too late i assume. 529? also too late?


any ideas would be super

 

[thefed]

I never heard of an esa before, but figure it would work well as i pay for my son's pre-school tuition out of pocket, and most likely will enroll him in private school soon


what are the guidelines/deadlines for opening things like this? esa, hsa, 529, etc?

 

[youbet]

I never heard of an esa before, but figure it would work well as i pay for my son's pre-school tuition out of pocket, and most likely will enroll him in private school soon


what are the guidelines/deadlines for opening things like this? esa, hsa, 529, etc?

Contributions to ESA's aren't tax deductible. But they are still a good idea for paying for private school tuition as both contributions and earnings can be withdrawn tax free to pay for qualified education expenses, including private elementary school for your son.

 

[bssc]

New work computer? Any bills sitting around needing to be paid?

 

[SteveL]

Not sure I understand your situation....not sure you can reduce self-employment taxes by IRA contributions, or anything else. Your net business income is subject to self-employment tax which occurs before deductions for IRA's etc. take place.

If you can reduce your Net Business Income via depreciation of equip etc, that would reduce your net business income and thus self-employment tax.

 

[FinanceDude]

What business are you in?

 

[frayne]

If you can qualify for an HSA you have till April 15th to contribute and you can park $5-6 K depending on your age. Might be worth your while to go and sit down with a tax professional and go over all aspects of your situation.

 

[crazy connie]

SEP?

 

[FinanceDude]

SEP?

yeah, my thoughts exactly, that's why I was trying to find out if he was a sole proprietor or just working as a W-2 for a company........

 

[Animorph]

If you have enough to spare, or the tax bite is really going to hurt, you can try something like the charitable gift fund at Fidelity (and probably others). Put your money in now (with a tax deduction), they invest it in a special fund you select, and then you tell them which non-profits to donate to any time in the future (it's a donor advised fund)

Sounds like a good idea if you need a tax break now and can pre-pay for your future charitable donations. The big problem is the added fees, 0.6% with $100 min per year. They are enough that you probably want to be a fairly generous donor to make this work for you.

 

[harley]

Psst...I've got a nice tax deductible variable annuity for ya, bud. It'll solve all of your problems.

 

[calmloki]

Betcha a trip to Vegas would help work that $10k down...

 

[FinanceDude]

Psst...I've got a nice tax deductible variable annuity for ya, bud. It'll solve all of your problems.

VAs are tax deductible? Who knew!

 

[brewer12345]

What business are you in?

Heh, what business isn't he in?

 

[target2019]

I didnt necessarily underestimate terribly, but the huge tax bill is going to hurt bad.

I maxed out a simple IRA as well as a roth (obviously not deductible).

Any ideas where i can park about 10k cash i have saved to lower my income a bit? kinda late i know, but just wondering what last minute efforts can be made short of buying a new company truck...hsa? too late i assume. 529? also too late?


any ideas would be super

1. SEP-IRA is handy, have had one for more than 20 years. I put 20% of my SE profit into that.

2. Look into Sec. 179 for depreciable assets.

3. Auto mileage is a major expense this year.

Having cash and parking it somewhere won't do anything for your tax bill. If this is profit, don't tempt the auditor.

 

[eridanus]

Solo 401k. Put in $15,500. Oh, damn, just looked it up - deadline is the 31st.

Yes, open a SEP. Then donate the rest via credit card.