Want to lower your tax bill?
There are a number of opportunities to offset prior-year income and capture credits.
Areas to look at include:
- Retirement plan contributions
- Deductions
- Penalties
- Credits
Retirement plans: Retroactive contributions
Your traditional Individual Retirement Account, or IRA, offers the biggest potential bang for the buck.
The Internal Revenue Service (IRS) allows taxpayers to make deductible prior-year contributions all the way up to the tax-filing deadline.
For tax year 2020, total contributions to all of your traditional and Roth IRAs for taxpayers under age 50 cannot be more than either $6,000, or your total compensation for the year if you earned less than that amount. Those 50 and older can make an additional $1,000 catch-up contribution, for a total of $7,000.1
Your actual tax deduction, however, may be limited if you or your spouse are covered by a retirement plan at work and your income exceeds certain levels.
Eligible taxpayers can also make retroactive contributions to their Roth IRA until April 15. Different phaseout limits apply for Roth contributions.
Because Roth IRAs are funded with after-tax dollars, your contribution will not yield a current-year tax deduction, but it could potentially produce a better investment return since earnings upon retirement can be distributed tax free.
Tax deductions: Roll up your sleeves
Most taxpayers take the standard deduction, a fixed dollar amount set forth by the IRS that reduces the amount of income on which they are taxed.
Why? Because it’s a lot less work. You don’t have to keep track of your expenses, or individually deduct them on IRS Schedule
As a result, many taxpayers who previously itemized deductions may find it more beneficial to claim the standard deduction this year.
Nevertheless, some people may opt-out of a standard deduction because they keep track of their expenses in an organized manner. For example, business owners claiming a tax deduction on vehicle mileage may keep a track of it by using online tools such as MileIQ or similar mileage tracking apps that can track logs and calculate mileage for each trip used for business travel.
Tax penalties
The only thing worse than giving Uncle Sam his due is leaving him a tip.
To avoid a potentially hefty late-filing penalty, you must submit your income tax return on time, regardless of whether or not you can afford to pay.
Indeed, the failure-to-file penalty can be as much as 5 percent of your unpaid taxes for each month or part of a month that your tax return is late, up to 25 percent of your unpaid taxes.
Submitting your tax return electronically ensures greater accuracy than mailing it in since the IRS e-file system flags common errors and kicks back returns for correction.
Tax credits
When it comes to lowering your taxable income, you are your best advocate.
Tax deductions, which reduce the amount of your income subject to tax, are great, but tax credits, which reduce your tax bill dollar for dollar, are even better. So don’t leave any tax credits or deductions for which you are eligible on the table.
Families with dependent children may be eligible to claim a credit of up to $2,000 per qualifying child under the Child Tax Credit.
If you paid for someone to care for your child, spouse, or dependent so you could work or look for a job, you may be able to claim the Child and Dependent Care Credit.
Similarly, those paying for higher education expenses may be able to claim one of two tax credits: the American Opportunity Tax Credit, or the Lifetime Learning Credit. You cannot claim both credits for the same student in the same year.
If you haven’t yet filed your tax return, there’s still much you can potentially do to minimize the amount you may owe.
By taking advantage of tax-favored retirement tools, filing an accurate return, and educating yourself on available deductions and credits, you might just save enough to pay off your credit card debt or catch a flight somewhere warm
Preventing Frozen Pipes for Business
Cold temperatures can reach areas of your facility that you seldom visit or cannot see, such as:
- Crawl spaces
- Closets
- Enclosed spaces (e.g., attics, lofts, roof spaces)
- Warehouses
- Isolated storage areas
Strategies to Help Prevent Frozen Pipes
Some prevention strategies to consider:
- Properly insulate and/or provide approved heat tracing for water-filled pipes located in exterior walls or unheated spaces.
- Drain any piping that is not required during the winter months.
- Maintain a minimum temperature of 40° F (4.4° C) in building areas with processes susceptible to freezing, wet-pipe sprinkler systems, fire pump houses and dry-pipe valve enclosures.
- Ensure that anti-freeze sprinkler systems have sufficient concentration (appropriate specific gravity readings) of antifreeze to withstand freezing weather.
- Inspect dry systems to help ensure air settings are correct, air maintenance systems are in good operating condition, and any pipe closets are well insulated. If any heat tape or heating systems are being used, ensure that they are UL-listed for this specific purpose and are in good operating condition. Dry-pipe sprinkler systems low points and auxiliary drains should be opened and drained of any water or condensation.
- Any branch lines on wet sprinkler systems exposed or subject to extreme cold weather should be insulated and heat traced. Electric heat tracing products should be UL-listed for this specific purpose.
- Fire pump test headers should be checked to ensure they have been properly drained.
- Fire pump and dry-pipe sprinkler system equipment rooms should be checked routinely to ensure the heaters are in good operating condition.
- The use of low temperature supervision can help to ensure rooms are being properly heated.
https://www.travelers.com/resources/facilities-management/preventing-frozen-pipes-for-businesses
Client Spotlight: GreenRoots
GreenRoots
COVID19 Response in Chelsea and East Boston
As an environmental justice organization serving some of MA’s most vulnerable residents, GreenRoots has trumpeted for years that our neighborhoods would be hit first and worst by a disaster. However, we anticipated that the crisis would be climate-related, not the COVID19 pandemic that is ravaging our communities.
Chelsea and East Boston continue to be the hardest-hit communities in MA. In the first pandemic wave, Chelsea’s infection rate was 6x higher than Massachusetts’ rate and higher than the hardest hit boroughs in New York City. Our neighbors fell ill and were dying to a devastating degree. Now, in the newest surge, Chelsea continues to have a consistently high infection rate. East Boston is identified as the hardest hit Boston community, with rates equaling or surpassing those in Chelsea. We are just seeing the beginning of the long-term impacts, both health and economic, of COVID19 in both these communities.
GreenRoots responded to the crisis swiftly and decisively, and continues to play a leadership role in the pandemic response for all of our neighborhoods on both sides of the Chelsea Creek.
Building systems to address community needs was a key initial focus of GreenRoots. On March 11th, GreenRoots coordinated a call of numerous Chelsea stakeholders to plan a coordinated response for the COVID-19 pandemic. This initial call turned into Chelsea’s Pandemic response team, with over 75 stakeholders, 10 working groups, with over 65 days of daily calls. GreenRoots was also instrumental in developing and implementing the East Boston Mutual Aid Network. Both in Chelsea and East Boston, these two systems provided the backbones for community-led responses. In addition, GreenRoots’ coordinated effort around public health (including a letter to Governor Baker with 47 community signatories) led to increased testing and National Guard support for food distribution.
GreenRoots was a founding partner of the One Chelsea Fund, a cash assistance program facilitated through the United Way in collaboration with the City of Chelsea, The Neighborhood Developers and La Colaborativa. Together, we raised more than $1.3 million for distribution to Chelsea residents. To learn more about the fund, check out a One Chelsea Fund Video. GreenRoots distributed approximately 1,700 checks ($425,000 in total) to residents. We are now launching phase II of the fund which will be directed to address anti-displacement efforts in Chelsea. In East Boston, our staff collaborated with Centro Presente which distributed $155,000 to local residents; and weekly boxes of food to food insecure families.
In addition to the aforementioned activities, GreenRoots helped with food distribution, diaper donations, funds for funerals, distributing PPE and multi-lingual message and much more.
To learn more, visit www.greenrootschelsea.org.