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November 6, 2019

4 Signs You Need to Change Your Tax Strategy in 2020

4 Signs Tax Strategy for 2020

With the end of the year quickly approaching, it’s a good time to check in on your tax strategy and make any necessary adjustments to save on your 2019 tax bill and start 2020 off on the right foot.

Even if you think your current tax strategy is working, taking a closer look before year-end could reveal new opportunities to better align your finances with your lifestyle and personal goals. After all, tax planning is not a one-time consideration, but a lifelong strategy that should evolve with you.

That’s why CBIZ compiled our 2019 Individual Tax Planning Supplement to help evaluate your personal tax strategy. The report highlights the biggest changes and provisions that should be factored into your financial plan and includes helpful tips to maximize your tax strategy in 2019 and beyond.

See below for a glimpse into four key signs that could signal your need to reevaluate your tax strategy. For more information, including moves that could minimize your 2019 tax bill, download the full tax planning supplement here.

  1. You’re on the edge of a higher tax bracket.

If you’re right on the cusp of moving into a higher tax bracket, it may make sense to lower your taxable income. There are several steps you can take to do this, including maximizing contributions to your qualified retirement plans, maximizing charitable contributions, and deferring discretionary sources of income.

  1. You’re living in a high-tax state.

The tax reform law introduced several important changes to state and local taxes (SALT). It imposed a $10,000 cap on SALT deductions for individuals (which includes income, property, and sales taxes) and increased the standard deduction to $12,200 for singles and $24,400 for married filing jointly. Therefore, it’s crucial to analyze all your options and determine whether itemizing your taxes or taking the standard deduction is the best path forward, particularly if you live in a high-tax state.

  1. Your tax rate is higher than 30%.

If you are in a high-tax bracket and exercise stock options or own pass-through entities, you may need to consider the alternative minimum tax (AMT) structure. Qualifying individuals may actually have a lower rate with the AMT — which tops out at 28% — than they would under a traditional tax structure.  Just make sure you understand the potential drawbacks and work closely with a tax professional should additional planning be required.

  1. 2019 brought capital gains.

If you recognized capital gains in 2019, review your portfolio closely with an investment advisor to identify any loss positions that could help offset them. You can also defer capitals gains tax by participating in the tax reform law’s Qualified Opportunity Zone (QOZ) program and transferring eligible proceeds to a designated QOZ Fund. However, timing is critical to maximize these benefits before the opportunity expires.

2019 Individual Tax Planning Supplement


Nate Smith is a Director in the CBIZ National Tax Office. He can be reached at nate.smith@cbiz.com or 727.572.1400.


Copyright © 2019, CBIZ, Inc. All rights reserved. Contents of this publication may not be reproduced without the express written consent of CBIZ. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly-traded and privately-held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ).

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