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  • Writer's pictureBrad Wooten

2020 year end tax planning tips

As part of my tax practice in Lake Nona, a community within Orlando, FL "the City Beautiful", I help clients every day with their tax planning and compliance. Many people wait until they're preparing their tax return to "get every deduction" and minimize their taxes. If you wait, you'll miss 99% of your tax saving strategies.

Here are the best of the best tax strategies for 2020. Please reach out to me if you need help or have questions about any of these strategies.

Bunching charitable gifts

If you are just barely itemizing or not quite itemizing, bunching donations can save thousands in taxes. A donor advised fund (DAF) is a great tool to utilize for this strategy.

Charitable giving for everyone

A new 'above the line' deduction has been added for charitable giving. That means you don't have to itemize to qualify for this. Unfortunately it was a pretty weak addition by congress at only $300, but don't miss out on it if you qualify.... every dollar saved in taxes in another dollar back in your pocket.

Donating appreciated assets

Perhaps you have assets that have appreciated, included stock that has increased in value. Donating an appreciated asset qualifies as a charitable contribution for the current fair market value of the asset and you do not have to report the gain as taxable gain.

Home office deduction

Work from home? Who didn't in 2020. Good tax advice is about saving taxes through deductions and credits. It's also just as much about saving tax penalties and interest by preparing your return correctly. W2 employees cannot take a home office deduction. Ask your employer about a home office stipend or reimbursing some home office costs. Self-employed? You likely can take this deduction.

Retirement planning

Defer your last paycheck or two into your 401(k) or 403(b).

Open an IRA and put up to $6,000 into it for a tax deduction.

Is a Roth IRA actually a better option even though you don't get a deduction?

You may also qualify for the retirement savers credit.

Did you take your RMDs for 2020? The CARES Act allowed you to skip these.


Have you considered a Qualified Charitable Distribution? If you are receiving retirement distributions, QCDs can save thousands in taxes, especially for those who don't itemize.

Timing considerations

Can you accelerate a deduction (such as a charitable gift) or delay income (such as a capital gain)? Deferring taxes is the number 1 strategy if you can't eliminate them. Paying a dollar in tax next year is better than paying it today (time value of money and all that).

If you're self employed this strategy can be your best friend. Along with deferring income or accelerating deductions, do you need to purchase new equipment? Will 2020 or 2021 be the better year to do so?

Capital gains and losses

Already realize some capital losses on the sale of stock in a taxable brokerage account? Consider selling some with gain positions to utilize those losses.

Already realize some capital gains? Consider tax loss harvesting by selling some loss position stocks to reduce your tax on those gains.

Don't forget to hold your stock for more than 1 year for preferential tax rates. It's possible you could pay 0% tax on long term gains based on your tax bracket. If you're border line for 0% tax on long term capital gains, what deductions can you qualify for and take in order to get down into that category?

HSA contributions

Do you have a health savings account? Did you max out your contributions for 2020?

College savings

Many states offer a deduction for contributions to a state 529 college savings plan. Open one for your child and save on state income taxes (no deduction for federal taxes on this one). Will you qualify for the America Opportunity Tax Credit? Perhaps pre-paying tuition for the spring semester would increase your tax credit in 2020.

Casualty losses

Were you affected b a large storm, hurricane, or forest fire? It's possible you qualify for a casualty loss deduction.

Moving expenses

Sorry, these are no longer deductible. If an employer reimbursed you for moving costs, that is now taxable compensation. Don't get caught off guard with higher than expected taxable income when you go to file your taxes, plan now.

Roth IRA conversion

Is your income lower this year than typical? If you have money in a traditional IRA and your income is low this year, it could be the perfect time to do a Roth conversion.

Child and dependent care credit

If your child or another dependent needed care so that you (and your spouse if married) could work, you likely qualify for the child and dependent care credit. Start gathering information now because sometimes it is hard to get. You need the tax ID number (social security number if an individual), name, address, and total amount paid per child for each provider.


Did you receive unemployment in 2020? That is taxable income. If you didn't have taxes withheld, plan now in case you owe some taxes instead of getting a refund.

If you or someone you know wants help with tax planning or tax preparation, please contact me at (407) 243-8678 or or schedule an appointment.


I enjoy helping individuals with tax preparation and tax planning as well as offering tax help to individuals dealing with tax debt, IRS liens, IRS levies, Wage Garnishments, etc. I also service businesses (including nonprofits and churches) by providing tax preparation and tax planning as well as consulting for accounting, bookkeeping, and other finance related questions. I live in Orlando, FL, but I serve clients all across the country. Schedule an appointment if you need assistance and take a look at the resource page.

6900 Tavistock Lakes Blvd Ste 400

Orlando, FL 32827

(407) 243-8678

Serving clients in Orlando, Lake Nona, Altamonte Springs, Apopka, Azalea Park, Celebration, Hunters Creek, Lake Buena Vista, Lake Hart, St Cloud, Winter Garden, Winter Park and via the latest technology remotely around the country.

*The blog posts (as well as the YouTube channel) are my personal opinions and thoughts about a wide range of topics. They are not meant to apply to individuals specifically and should never be relied on as tax or investment advice. You should contact a professional for specific advice before taking action.

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